What can a developer do post April 1st 2016?
SDLT is here. Most in the industry will be aware that since 1st April this year (2016) anyone purchasing second properties will be copped for an additional 3% SDLT or stamp duty land tax. This is not an exciting development and may still come as a shock for some. Sadly there is very little wriggle room and exemptions are few and far between. The only real option is if you are replacing a main home or residence.
SDLT equals more costs and more hassle?
You can imagine that any property developer is going to be stung for this. It will be especially true for anyone who might be considering the purchase of pre-existing residential stock. Yes, we are talking to all those with redevelopment on their mind. This will definitely add costs which will be inevitably passed on.
Bare or make land? You choose
SDLT does only affect residential dwellings and properties suitable for redevelopment. You won’t get taxed if you are talking about naked land (sounds far more interesting than bare) or even the type of commercial buildings Tunji Adebayo & Company are normally involved with.
Inevitably this has not sat well with many and negotiations have been taken place all over the country to ensure certain things are put in place before the sale. Countrywide Properties reported in their latest Country Properties Life Magazine that prior to a developer actually getting their hands on a site, the vendor would actually demolish anything on the land so it becomes bare land once more. Obviously this may not be desirable or appropriate in every case. You cannot even guarantee that things will go smoothly after such a demolition has taken place.
However, what might be borne in mind is that pre-existing SDLT reliefs may well become more usual. These might include:
- Choosing to apply commercial SDLT on bulk purchase
- Utilising Multiple Dwellings relief
But what we do realise is that any contrivance such as a ‘scheme’ will not do any longer. However, due to the complexity of SDLT it is worth consulting with an expert so that any statutory relief possibilities are maximised. It will definitely pay to explore these avenues first.
If you need assistance regarding the leasing of commercial property please don’t hesitate to contact us.
Tags: property developer