Stamp Duty holiday -how does it affect you?
It is often said buying a house can be a stressful event. 2021 sees that potentially compounded with buyers seeking to complete prior to the deadline for the Stamp Duty Land Tax reductions ending on 31st March. These reductions are being referred to as the SDLT holiday.
Keeping the property market going
In Spring 2020, part way through the first UK COVID-19 lockdown, residential property transactions dropped by 20%, causing concern for the housing market and the UK economy. The SDLT holiday was introduced in July 2020, raising the stamp duty threshold from £125,000 to £500,000 until 31st March 2021, with the intent of encouraging and stimulating the market. With buyers able to make considerable savings in SDLT, it was hoped the market would be stimulated and jobs protected.
Having been introduced as a short-term solution to a slowing market, we now approach the point at which the deadline for buyers that will benefit from the holiday looms, placing increased pressure on buyers, agents and property lawyers. It is inevitable some transactions scheduled for completion prior to the deadline will spill over to April and beyond, leaving the buyer with an increase payment for SDLT due, and for some, that may mean the SDLT is debilitating to the entire transaction.
To maintain market stimulus, there are calls for the Government to extend the SDLT holiday to capture as many transactions as feasible whilst the Coronavirus pandemic continues.Government is debating the issue and whilst there is no conclusion announced at the time of writing, there is market discussion as to whether the scheme will be extended by date, or whether the scheme can be extended in the very short term to cover properties that are sold subject to contract as at 31 March 2021.Ministers took part in a virtual debate on 01 February 2021 but as yet no decision has been announced.
However, there is still time to get sales completed before the end of the current SDLT holiday but buyers must have a clear conversation with their solicitor as to whether completion is viable and take action now based upon that advice.
If you are impacted by the SDLT holiday and wish to discuss it please do not hesitate to visit ehlsolicitors.co.uk/services and get in touch with your local EHL Solicitors branch.
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