The property developer is also subject to certain legal obligations that they are required to fulfil. Planning permission is generally given to developers on a pre-condition that the developer would also develop certain basic amenities for the community. Some examples of these amenities include schools, parks and more.
Once the said obligation is completed, the property is transferred to the authorities to run. Here, the developer could end up paying two successive SDLT charges to the tax authorities – once when the land is bought from the original landowner and next when the developed building or school is handed over to the authorities. If such is the case, the developer can claim SDLT relief on the first sale.
Property developers often find themselves paying more Stamp Duty than necessary due to missed exemptions and reliefs. Some of the commonly overlooked ones are related to the acquisition of flats with multiple dwellings relief or the purchase of land with existing planning permission.
Solicitors, who play a crucial role in the process, may unknowingly input incorrect or incomplete information into HMRC’s Stamp Duty Calculator.
Consequently, this can result in an inaccurate calculation of the Stamp Duty amount to be paid. To avoid such situations, it is essential for solicitors to stay updated on the available exemptions and reliefs specific to developer purchases of residential and commercial properties.