Ejerforeningen Æblehaven

Stamp Duty On A Commercial Lease Agreement

Stamp duty is a tax levied by the government on documents that transfer ownership of real estate. The only factor that influences the amount of stamp duty is the value of the property. Stamp duty must be paid for both residential and non-residential real estate and must be paid by the buyer. In the case of commercial real estate, stamp duty is also due on the rental of real estate. This does not only apply in the event of a sale. (see point below) If the principal value of the rent is more than £125,000 (the SDLT threshold for residential property), the buyer pays SDLT on the rent and premium. However, in this case, calculate the tax with a flat rate of 1% on the amount of the capital value above the SDLT threshold. If you have already used the threshold, for example. B in the case of a tied lease, use 1% of the total useful value to calculate the tax. When a lease continues from one period to the next, it is called a “periodic lease” (unless one of the parties announces termination). This is the most common example of an open-ended lease. The monthly rent increases by £200 at the beginning of the new lease and the old lease ends 12 months later, the rental amount taken into account for this period is £2400. Then take into account the entire rent due for the rest of the term of the new lease.

What is often overlooked is not only that you pay stamp duty when buying a commercial property is also applied when you rent a property for commercial purposes. 1% of the annual rent is payable in stamp duty on the rental agreement or rental contract of a commercial property. An additional fee of € 12.50 must be paid if the rental agreement contains a rent verification clause. Stamp duty must be paid within 44 days of entering into the lease or lease. They also pay stamp duty on leases that are land-related, such as for example. Β rights of way. If the original lease was a Stamp Duty lease granted prior to the introduction of SDLT on December 1, 2003, use the entire rent for the term of the new lease to calculate the value of the capital. The value of the first five annual rents is used for the calculation of the value of the capital.

If the lease is longer than five years, the highest annual amount paid in the first five years is used to calculate the value of the capital for those successive years. A developer builds a few apartments and sells them on 99-year leases.