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3 Ways To Reduce Stamp Duty Land Tax

There are several ways to reduce Stamp Duty. Here are some of the examples:

 

 

1. Commercial Property

Purchase of commercial property results in lower Stamp Duty compared to residential properties of the same value.

2. Mixed-use Property

A mixed-use property, wherein it has both residential and commercial aspects, attracts lower rates of Stamp Duty. The 3% additional residential property rates do not apply to mixed-use properties as residential rates are not applicable to them. This is particularly appealing for taxpayers who are buying a second home.

3. Rural Property

Purchase of a rural property that comes with surrounding land. This property can be classified as mixed-use property. Therefore, results in lower Stamp Duty.

EXAMPLE

Mr Winson, who currently owns a flat in Manchester, bought a farmhouse and its neighbouring land for £1,000,000. He then leased his land to a farmer for his cattle to graze for two years and kept his Manchester flat as an investment.

By declaring his farmhouse as a mixed-use property, his Stamp Duty liability would only be £39,500 due to lower Stamp Duty rates and the non-applicable 3% additional surcharge.

If he had not declared his property as mixed-use, Mr Winson would have a Stamp Duty bill of £73,750.

GO BACK 4 YEARS

Each case will need careful consideration and we suggest you seek expert advice. If you think you missed this opportunity, you can reclaim any Stamp Duty within four years of the completion date of the property purchase.