Osborne announces commercial stamp duty reform

From midnight tonight, commercial stamp duty will have a zero rate band on purchases up to £150,000; a 2% rate on the next £100,000; and a 5% top rate above £250,000.

There will also be a new 2% rate for those high value leases with a net present value above £5 million.

The reforms are estimated to raise £500 million a year.

Around 9% of businesses will pay more, but over 90% will see their tax bills cut or stay the same, according to Osborne.

He said:

"At the moment, a small firm can pay just £1 more for a property and face a tax bill three times as large. That makes no sense.

"So, if you buy a pub in the Midlands worth, say, £270,000, you would today pay over £8,000 in stamp duty. From tomorrow you will pay just £3,000."

Charles Haresnape, Group Managing Director at Aldermore said:

“The new tiered system of stamp duty rates for commercial property will be a real positive for smaller businesses in particular as they will no longer be hit by large-scale rises under the current slab system when investing in properties just over a band boundary. Smaller developers who are vital to solving the housing supply issues in the UK continue to struggle with access to finance, with a recent industry survey showing that more than 50,000 construction and real estate firms began the year in ‘significant’ financial distress.

“We are pleased to see the government recognising the importance of the contribution that SMEs make to the UK economy, and reforms to stamp duty and business rates will provide an enormous boost to those considering further investment over the coming year."