UK Law and Practice Contributed by: Colin Rodrigues and Harminder Sandhu, Hawkins Hatton Corporate Lawyers Ltd
2.9 Condemnation, Expropriation or Compulsory Purchase A compulsory purchase order (CPO) of property enables councils, central government, utility companies, etc, to purchase land if it is in the public interest to do so. “Public interest” could include: • town-centre regeneration; • housing developments; • road-building projects; • rail-building projects; and • airport expansions. If a CPO is granted, the landowner is paid com - pensation for the loss of the property. Notice is served on the landowner of a proposed CPO, and approval from the government/parlia - ment is then obtained. This notice will set a time limit for the landowner to lodge any objections. These are considered by the relevant authority, which then decides whether the CPO should be granted. If a CPO is granted, the purchase will proceed, and the landowner will be compensated. The compensation is usually equivalent to the market value of the property together with reasonable moving costs, SDLT for buying an equivalent home, and reasonable legal and lender’s fees. 2.10 Taxes Applicable to a Transaction SDLT is payable by the buyer on all property transactions in the UK. The rates of SDLT are determined by the price of the property and the designated use of the property (ie, whether it is commercial or residential). Multiple dwellings relief (MDR), where purchas - ers of residential property acquire more than one dwelling in a single transaction or linked transac -
tions, is abolished for transactions with an effec - tive date on or after 1 June 2024. For contracts which exchanged on or before 6 March 2024, MDR will continue to apply, even where com - pletion of the purchase takes place on or after 1 June 2024. This is subject to there being no variation of the contract after 6 March 2024. MDR will continue to apply to contracts that are substantially performed before 1 June 2024. For linked transactions which include the pur - chase of dwellings both before and after the change, those pre- and post-change transac - tions will be treated as unlinked for the purposes of MDR. Residential Property Rates SDLT is usually payable on property prices above GBP250,000. From September 2022, the SDLT rates are: • GBP0 to GBP250,000 – 0%; • GBP250,001 to GBP925,000 – 5%; • GBP925,001 to GBP1.5 million – 10%; and • more than GBP1.5 million – 12%. Relief for First-Time Buyers First-time buyers pay no SDLT on properties worth up to GBP425,000; thereafter, the usual rates apply. Residential Leasehold Sales and Transfers If a new residential leasehold property is pur - chased, SDLT is payable on the purchase price (premium) of the lease as if it was the sale price of a freehold property. The level of rent due under the lease is not taken into account.
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