Extension of exempt threshold
A holiday from stamp duty land tax ('SDLT') was introduced in September 2008 for residential properties where the consideration for the acquisition did not exceed £175,000 and the acquisition occurred between 3 September 2008 and 2 September 2009. The effect of the treatment was to raise the exemption threshold from £125,000 to £175,000. The benefit of this increased threshold has been extended until 31 December 2009.
As with the original change to the threshold it is considered that the impact is more likely to be felt in respect of properties acquired outside London notwithstanding the fact that it is estimated by HMRC that around 60 per cent of current property purchases benefit from the extension of the threshold. For purchases occurring towards the end of 2009 where the consideration is in excess of £125,000 but beneath the threshold, care should be taken to ensure that the "effective date" of the transaction is met before the cut-off date. The "effective date" is normally the date of completion but may be earlier if the contract is substantially performed eg, if the purchaser takes possession or pays the purchase price in advance of completion.
