Budget 2016: Chancellor Pledges New Rates For Commercial Stamp Duty

Experts Say Small Business Will Welcome Announcement But Property Industry May Not Share Sentiment


Kate Rawlings, Press Officer | 0114 274 4238

In this afternoon’s Budget announcement, the Chancellor unveiled measures that he claimed would see "big tax cuts for small firms", with new rates for commercial stamp duty.

He said the move followed on from the success of stamp duty changes announced in a previous budget for people buying homes.

The new rates, which come into force from midnight, will start at zero up to £150,000, with a duty of 2% on the next £100,000, rising to 5% for costs over £250,000.

He added that transitional arrangements were in place for deals that are already in progress.

The Treasury estimates that changes will raise £500 million per year from 9% of those affected by the higher rates, while over 90% will see tax bills reduce or stay the same.

Partner and tax expert at law firm Irwin Mitchell, Alex Barnes, said:

Expert Opinion
“The Budget 2016 is one that many small businesses, the self-employed and entrepreneurs will welcome. But big businesses, particularly those in the property industry are however unlikely to view the Budget favourably.”

“Despite the proposed cut to corporation tax, SDLT on large commercial property transactions will increase, in some cases significantly especially for investors in London and the South East. If interest relief is cut, this could have a dramatic effect on the UK property industry which relies heavily on debt funding.”

“The commercial property industry is an easy target for the Chancellor given its attractiveness over recent years. However, this may, like the high end residential property market now stall, leaving the Chancellor’s expectations of an extra £500 million a year more wishful thinking. Ultimately it may lead to a decrease in tax revenues, leaving a bigger hole for him to fill going forward.”

“The Chancellor appears to have failed to recognise the contribution the commercial real estate industry has made to his coffers over recent years.”
Alex Barnes, Partner