Limited companies will not be exempt from Stamp Duty surcharge

Chancellor George Osborne’s 2016 Budget has ruled out Stamp Duty exemption for limited companies.

The government has confirmed that limited company investors buying residential properties will have to pay the 3% Stamp Duty surcharge.

This follows the 2015 Autumn Statement, when the government announced a three percentage point surcharge on second homes and buy to let properties and published a consultation on a proposed exemption for buy to let investors owning 15 or more properties in a limited company structure.

A policy statement supporting the 2016 Budget said: “…the government’s view is that the evidence suggesting that in the absence of an exemption there would be an adverse and material effect on housing supply is not compelling.

“Whilst the higher rates may have some effect on off-plan purchases, the government’s view is that the overall effect on housing supply is not material and housing developments will remain attractive for corporate investors as well as potential home owners.

“The government has decided to apply the higher rates equally to all purchasers without an exemption for significant investors.”

The government confirmed that only properties worth less than £40,000, as well as houseboats and caravans will be exempt from the 3% Stamp Duty surcharge.

The tax surcharge, which comes into force on 1 April, affects anyone buying a residential property in England, Wales and Northern Ireland who on completion owns two or more properties and is not replacing a main residence.


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