Stamp Duty Land Tax (SDLT) is once again under the spotlight, with the deadline of the current ‘holiday’ due to expire on the 31 March 2020.
Back in July, at the end of the first lockdown, the Chancellor announced a temporary stamp duty holiday, which cut the rate of stamp duty to 0% for any purchases of residential property for £500,000 and under. This had a dramatic, and welcome, effect on the property market, creating a new surge of interest and demand in the property sector, which had endured 3 months of pent up demand.
Take for example a purchase proceeding at £400,000 – previously this would have generated a SDLT bill of £10,000, whereas under the current holiday this is reduced to nil.
It is perhaps unsurprising then that property prices have risen steadily during the last 6 months of 2020 – Nationwide Building Society reported that the average house price in October 2020 was at a five year high – and at GAD Solicitors, we have seen a significant upturn on the number of transactions we are dealing with.
However, with the end of the holiday now looming large on the 31 March 2021, and the conveyancing process once again coming under pressure owing to the latest lockdown, prudent buyers are already aware that completion may not be achievable by the deadline. Rightmove have already reported via their monthly asking price index, that prices have dropped by around 0.9%
As such, it is perhaps not surprising that a petition which was started in October 2020, has now reached 124,000 signatures and has prompted a debate in Parliament on the matter which will be held on 1st Feb. There has already been some indication from the Government that it does not have an intention to extend the holiday at this stage, calling it a ‘temporary relief’, but since the holiday was created there have been a further 2 lockdowns.
Lockdowns, of course, have a dramatic impact on the conveyancing process, from the turnaround time of local authorities, the ability of surveyors to attend properties and for solicitors and mortgage lenders in working remotely, which most importantly has an effect on buyers and sellers who through no fault of their own, may be unable to meet the 31 March deadline.
It remains to be seen how the Government will decide to deal with the position – some in the industry are calling for an extension to the current arrangement, whereas others are taking the opportunity to point out the flaws in stamp duty land tax as a whole and call for a much wider-ranging reform.
In the meantime though, to avoid any unnecessary delays, we would suggest to those keen to complete on or before 31 March, be prompt with supplying certified ID and initial paperwork to your solicitor and discuss search result turnaround times at the outset.
This will assist your solicitor in managing your expectations and help to progress the transaction at an early stage.
For any questions or concerns relating to the Stamp Duty Relief deadline please don’t hesitate to contact GAD solicitors on 0151 236 5000 or email info@gadlegal.co.uk.
