Self-invested personal pension (SIPP) providers have welcomed the Chancellor’s move to reform stamp duty on commercial properties.
Osborne used his eighth Budget speech to state commercial stamp duty would be 0% on purchases up to £150,000, 2% on the next £100,000 and 5% above £250,000.
There will be a new 2% rate for high-value leases with net present value above £5m.
The changes are effective from tonight.
Talbot and Muir head of pensions technical Claire Trott said: “The changes to commercial property stamp duty is a change that is welcome to SIPPs and SSAS members, we were already seeing an increase in interest in commercial property within our schemes because of the lack of stability on the stock market.
“Investors like the fact that it is a physical asset and this reduction will mean it is more affordable for those wanting to invest in a time when contributions are being ever limited by the annual allowance and lifetime allowance.”
Trott explained a property valued at £260,000 would pay £7,800 today but this will drop to £2,500 from midnight.
Suffolk Life head of marketing Greg Kingston: “The bandings proposed by the Chancellor will see a large number of SIPP investors face a reduction in the cost of Stamp Duty Land Tax when buying a commercial property with a SIPP.
“Commercial property and SIPPs have been a real success story, and this move should encourage more SIPP investors to consider commercial property investment, as well perhaps those buy to let investors – hit hard in the 2015 Budget – looking for an alternative.”
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