SDLT increase slashes development profits

The many developers in the prime residential areas of London will be left with thoughts of what might have been as the 5% increase in stamp duty land tax (SDLT) from 7% to 12% for high-end properties could knock six figure numbers off returns from both existing and planned developments.

“The reason for this is a potential double hit”, explains Vince Wood, tax partner at Moore Stephens. “First a further 5% is added to the purchase cost and then, to the extent the final customer seeks to off-load this extra cost on the developer, the total hit on profits will be not only 5% on the purchased price but possibly 5% off the sales price as well.

“This could lead to a further increase in the number of commercial premises being converted to residences, since commercial property is not affected by the changes.”




Real Estate team
Business Tax team

Related links

Real estate
Business tax