To stimulate the housing market during the pandemic, the chancellor has put in place a temporary measure meaning many home buyers will not have to pay Stamp Duty.
The nil-rate period is set to last until 31 March 2021. With purchases often taking several months to complete, if you want to save money by not paying Stamp Duty you will need to move forward without delay.
The Stamp Duty holiday
The Stamp Duty holiday, announced on 8 July 2020, means that someone buying their main residence in England or Northern Ireland will pay zero Stamp Duty if it is priced at £500,000 or less. On a property costing £400,000, this is a saving of £10,000.
If the property is priced at over £500,000, tax of 5% is payable on the remainder of the price.
There is also a reduction on the Stamp Duty payable on a home that is not a main residence, for example, a second home or a buy-to-let property. Tax is payable at 3% on a price between £40,000 and £500,001 plus 8% on the amount over £500,000.
The buying process
The buying process starts not just with viewing properties, but also with working out a budget and finding a mortgage.
Once you’ve had an offer accepted, your solicitor will be sent the contract papers by the seller’s solicitor and will raise enquiries and apply for the necessary searches.
You will need to finalise the mortgage application and arrange for a survey to be done. Once everything is in place and the seller is also ready, your solicitor will exchange contracts and the completion date will be fixed.
Speeding up the time taken to purchase
In order to meet the Stamp Duty holiday deadline, it will be important to make sure progress doesn’t stall.
By arranging a mortgage offer in principle before you have found a property you can save time once you’ve had an offer accepted. By instructing a solicitor in advance, you can make sure that the contract papers can be sent out as soon as they are ready and also demonstrate to the sellers that you are a serious buyer. This also applies if you have a property to sell. Make sure your solicitor is in place as soon as possible so that they can guide you as to the documentation you will need to complete.
Make sure that your estate agent stays in touch with the other parties in the chain so that any delays can be identified and dealt with as soon as possible.
Your solicitor will work proactively to make sure everything is done to complete the purchase by 31 March 2021.
If you are thinking of buying or selling your home and you would like to speak to one of our expert property lawyers, ring us on 0333 305 5189 or email us at info@lpropertylawyers.co.uk.
