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on the fine print
With the hoo-haa and headlines behind us,
Shimon Shaw examines the April Budget
and explains what it really means for property
ot too many surprises in last enfranchise (RTE) company. Currently,
month’s budget. We’re doing however, there is no such thing as an RTE
fine. Yes there are a few company since the legislation which
deficits here and there but introduced RTE companies hasn’t been
there is hope on the horizon. brought into force.
There is good news if you As from 22 April, the relief is extended
have an old car but not so good if you earn to anyone exercising their right to
more than £100,000 and it’s even worse if collective enfranchisement. This will mean
you earn more than £150,000. that the nominee purchaser who buys the
For the property sector there was freehold could pay less tax since the rate is
surprisingly little, given the high profile based on the average price of the freehold
that falling house prices and a slump in per tenant as opposed to the total paid.
both residential and commercial property
have seen. But as ever, when you get into affordablE housing
the fine print there are some details which There are three main changes here.
escaped the broadsheets. This article There is currently relief for registered
covers the main changes affecting stamp social landlords in certain circumstances
duty land tax or SDLT which (other than (eg where the purchase is funded by public
the first one – the good news) largely went subsidy). This relief is going to be extended
unreported. to cover the new profit making bodies Pic:
known as Registered Providers of Social
ExtEnsion of zEro ratE for Housing. These don’t exist yet as the social landlord then grants them a shared
rEsidEntial propErty legislation creating them is not yet in force. ownership lease. The relief ensures that the
No surprise here, the extension to the zero The favourable SDLT treatment of charge to SDLT when the shared
per cent threshold for residential property purchasers under shared ownership ownership lease is granted is based only on
will continue from September to the end of schemes will also be extended to shared that lease and not the rent paid under AST.
the year. This will benefit purchasers of ownership schemes operated by Registered
houses for less than £175,000. In January Providers of Social Housing, where the altErnativE financE bonds
2010 the lower threshold will revert to scheme is assisted by public subsidy. Moving from social housing to high
£125,000. This has been a useful exemption The SDLT treatment of purchasers finance. As part of the Government’s plan
and it could have been very beneficial to under rent to shared ownership (“Rent to to make the UK a better environment for
extend this concession. HomeBuy”) schemes will be simplified. inward investment there have been a raft
These are where assured shorthold of measures over the last few years
EnfranchisEmEnt tenancies are granted to a tenant and the ensuring that Islamic finance instruments
Enfranchisement is a popular way to
increase the value of your property with no
need to call in the decorators. Owners with The extension to the zero per cent
long leases over flats have the right
collectively to force the landlord to sell the threshold has been useful and it
freehold to a nominee (normally a
company) owned by them collectively. could’ve been very beneficial to
There is an SDLT relief for
enfranchisement through a right to extend this concession.’
16 JUNE 2009 PROPERTYdrum
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