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BPF welcomes relief from SDLT increase for commercial property

Today the British Property Federation welcomed the news that the increase in SDLT to apply from 6 April 2011 for residential property transactions of over £1m in consideration will not apply to commercial property. 

BPF also welcomed the SDLT relief for first time buyers and further detailed measures in the budget which it had campaigned on with regular technical input to HM Treasury, including on the treatment of stock dividend issues from the quoted REITs property sector.

Peter Cosmetatos, the British Property Federation’s director for finance policy, said on the SDLT measures: 

“While we have concerns over how this could affect bulk investment from institutions on the residential side, the Treasury’s desire to not impede the commercial market is very welcome. The BPF has worked hard to ensure that those in government fully understand the nature of the market and we are all particularly grateful that the status-quo has been maintained.”

David Melhuish, Director at SPF added:

'Figures that SPF has obtained from the Registers of Scotland suggest that an increase on commercial property transactions above £1m would have added over £71m in SDLT costs to the Scottish commercial sector since April 2009 alone.  At a time when our commercial market is beginning to recover its confidence, it is therefore welcome that we have avoided future additional tax increases via SDLT.'

The increase in the residential SDLT rate to 5% does raise pressure for reform of the rules applying to bulk purchases of residential property however, whereby major investors find themselves charged at the higher rate even when properties may individually be liable for much lower SDLT rates.  The Treasury is currently consulting on possible options for reform in order to boost institutional investment in the private rented residential sector.

Additional BPF comments on today's Budget announcements may be viewed here.