From midnight tonight, a sliding scale will come into effect on stamp duty charges on commercial property. The first £150,000 of a commercial property’s value will escape stamp duty altogether, while the value between £150,000 and £250,000 will be taxed at 2%, and any value above £250,000 will be 5%.
Ezra Nahome, CEO at Lambert Smith Hampton, said: “In hindsight, this was predictable given the residential stamp duty reforms that were announced in last year’s Autumn Statement.
“The immediate impact of the rise in stamp duty for commercial property above £1.05m will be a cut of as much as 1% in deal prices to offset the greater amount of tax payable. Sellers are likely to have to swallow a reduction in receipts in order to get their transactions over the line.
“Of more concern is the timing of today’s announcement. In the past, reform to commercial property stamp duty has been introduced at a time when the market has been buoyant so investors have been able, albeit grudgingly, to absorb the extra costs.
“At the moment, however, investors are already concerned about the outlook for the global economy and the uncertainty caused by the referendum on our continued EU membership. Even if one believes that taxing commercial property sector is fair game, this is not the right point in the cycle to be trying to extract more tax receipts from investors.”