If you’ve been considering buying or selling your home over the last 7 months or so then it is highly likely that the stamp duty land tax holiday (SDLT) has been a major consideration
Introduced in July last year by the chancellor (to help boost the property market following the first lockdown) the SDLT holiday has already helped plenty of home buyers save thousands of pounds.
In a nutshell, if you are buying a property and manage to complete on or before 31st March then you will pay zero tax on the first £500,000 a saving which could be as much as £15,000!!
There is no question that the stamp duty holiday has had the desired affect on the property market with more mortgage approvals last year than in 2019 despite the lengthy lockdowns. Thousands of buyers have taken the opportunity to take advantage of the savings available and purchase a home.
With SDLT holiday due to come to an end in the next 7 weeks or so (at the time of writing), there are a number of sales which may not make the deadline through no fault of either buyer or seller. The 2 additional lockdowns (November & December 2020) have contributed to delays and disruption which have hit the property industry from conveyancers/solicitors right through to removal companies!
What are the options available?
Well, Rishi Sunak could announce on March 3rd (Budget day) that he is extending the SDLT by anything up to 6 months or even longer! This would act as another boost to the property market and no doubt provide the incentive to the next wave of would-be buyers who were not quite ready to take advantage of the original dates set back in Summer 2020.
He could decide that the deadline is the deadline and we must stick to it! The additional revenue that SDLT brings in would be much welcomed by the exchequer especially as the UK has suffered the worst financial impact amid the Covid pandemic of any G7 country. There is however a strong likelihood that this option will cause a large number of sales to fall through. Faced with an additional tax bill that they didn’t plan for when their purchase was agreed, some buyers would be left with little option but to abort the transaction (if a price reduction cannot be agreed).
Some experts are suggesting that the Treasury are considering scrapping not only stamp duty but also council tax and replacing them with a ‘property tax’ which would take into account the existing values of homes rather than 1990s valuations which is what council tax is currently based on.
Another option (and one that I personally think is fairer) is an extension of possibly 4-6 weeks which should allow those purchases that are already underway enough time to reach a conclusion. This would provide a respite to some conveyancers/solicitors who are no doubt under immense pressure with the current workload of buyers pushing to get their property purchase across the line. It would also free up availability for removal firms who have been inundated with requests from those wanting to move before the end of next month but unable to confirm because they have yet to exchange!
With this option, he may choose to include a caveat that only those whose property purchase is already underway will be able to take advantage of the extension - although it would be interesting to see what would constitute as ‘already underway’?!
Afterall if an extension of say 6 weeks was announced as part of the Chancellors budget speech I am pretty sure that would act as an opening for some new buyers to take advantage….. I would!
Anyway with only a few weeks to go till Rishi Sunak’s budget speech all of us who have an interest in the property market will be on tenterhooks!
Well, I hope this helps. Not only do I provide posts to help promote and support the community of Tooting and its surrounding areas, but I am a local property expert too. As always, please do get in touch with me should you need help or advice with the sale or rental of your property, I am here to help.
Chuk - Your Local Property Expert for Tooting and Surrounding Areas
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