London Prime Residential Property Taxes 2013

 

The current rates (which came into effect in 2012) of Stamp Duty Land Tax payable when UK property is purchased are as follows:

Current Stamp Duty Land Tax (SDLT) rates                 

  

     Property Value                                                                                SDLT rate

Up to £125,000                                                                                             0

Over £125,000 to £250,000                                                                      1%

Over £250,000 to £500,000                                                                     3%

Over £500,000 to £1 million                                                                     4%

Over £1 million to £2 million                                                                     5%

Over £2 million                                                                                              7%

Over £2 million (purchased by certain non-natural persons)              15%

 

(Source: HMRC)

 

 

 

Furthermore HMRC has introduced the following annual charges on properties valued above £2million, called the Annual Residential Property Tax. These are brought into effect by the Finance Bill 2013 and apply to residential property bought through a corporate vehicle.

 

Annual charges applying to property purchased by “non-natural persons” (Annual residential property tax)

          Property value       Annual charge
£2m-£5m                     £15,000
£5m-£10m                  £35,000
£10m-£20m               £70,000
  £20m+                         £140,000 

(Source: HMRC)

 

The following exclusions apply to the Annual Residential Property Tax and are not subject to the charge:

  • Properties purchased and held for development purposes.
  • Properties purchased and rented for income on a commercial basis.
  • Properties used for business purpose and which are also open to the public for at least 28 days a year or used as a business venue.
  • Properties used for commercial purposes
  • Properties belonging to charities
  • Company properties used for employee accommodation
  • Farmhouses occupied by  farmers
  • Diplomatically  owned properties.
  • Publicly owned properties