Stamp duty loophole closed

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The Independent Online
Thousands in the throes of enfranchising - buying the freehold of their leasehold homes - must have paled when they heard the Chancellor say that he would impose full stamp duty on property exchanges.

The prospect of swapping your lease for a freehold, then having to pay stamp duty on the full market price of the freehold is enough to put anyone off the thought of enfranchising. But Kenneth Clarke has closed the loophole on property swaps, and enfranchising is not caught.

John Samson, property partner with the solicitors Nabarro Nathanson, said: 'You pay stamp duty only on the value of the interest you are acquiring - a freehold subject to a lease. You are not swapping.'

Had you exchanged freehold properties with someone else - parents and children might swap houses, for example - you would have paid stamp duty only on the difference in the prices, a considerable saving.

In swapping a freehold for a leasehold - a house for a flat - or a leasehold for a leasehold, only 50p stamp duty was payable. Mr Clarke has removed the financial incentive from swapping to ensure you pay stamp duty on the value of the property you buy.

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