What is the stamp duty holiday?
Last year, the government temporarily increased the amount at which stamp duty is paid to £500,000, for property sales in England and Northern Ireland.
The move was aimed at helping buyers who might have taken a financial hit because of Covid. It could save them as much as £15,000, if they were buying a property of £500,000 or more.
It was also intended to boost a property market hit by lockdown, which had seen house prices fall for four months in a row.
The tax break was due to end on 31 March this year, but Chancellor Rishi Sunak yesterday announced a 3 month extension of the Stamp Duty Land Tax (SDLT) holiday. After this date, the starting rate of stamp duty will be £250,000 until the end of September. Stamp duty will then return to the normal level of £125,000.
What does this mean for your home move?
- The reduced rates of SDLT which were originally set to end on 31 March, will now be extended until 30 June 2021.
- The £250,000 cap on SLDT will hopefully mean a smoother transition back to the standard rates of Stamp Duty Land Tax in the Autumn.
The extension is a huge sigh of relief for home movers who were worried that they were going to miss the reduced rates of SDLT holiday.
What happens if I start a property purchase now?
If you’re only just starting your property purchase now, it’s important to understand that even though the SDLT holiday has been extended, there’s a real possibility that you may not complete on your purchase before 30 June.
It’s not unusual for property transactions to take up to 6 months when delays and chains are involved. There have been increased numbers of buyers rushing to try and meet the SDLT holiday deadline to benefit from lower SDLT rates and all our Conveyancers have seen delays in most property transactions during the pandemic.
How are LPL working to help resolve delays?
Our Conveyancing teams are working extremely hard to reduce delays wherever they can. If the delays are a result of a third party, such as searches or another party in the chain, it may unfortunately be out of both yours and our control.
We will strive to support you throughout your move, which includes being open and honest with you about realistic timeframes and deadlines involved in moving homes during the pandemic.
During the past few months we have been recruiting heavily across all of our teams to ensure we have additional resource to cope with the added volume and provide additional support. This includes a new dedicated Client Services Team who are specially trained to deal with queries from clients, agents or introducers quickly and efficiently.
What other help for homeowners is there?
A new ‘mortgage guarantee’ was announced in the Budget. This begins in April and the government will provide a guarantee to lenders who offer mortgages to buyers with a deposit of just 5% on homes with a value of up to £600,000.
The government says: “the scheme will allow more people to become homeowners.
Lloyds, NatWest, Santander, Barclays and HSBC will be offering 95% mortgages from April, with other lenders including Virgin Money expected to launch products later.”
Please visit https://www.gov.uk/stamp-duty-land-tax/residential-property-rates to see the latest SDLT residential property rates.
If you have any further queries about how this SLDT extension may affect your property transaction please contact us on 0333 305 5189 or by email at clientservices@lpropertylawyers.co.uk
