Sarah is here to help house buyers and sellers get to grips with the conveyancing process. This month, she highlights the impending end of the stamp duty holiday…
My solicitor has said the house I am buying is unlikely to complete before the stamp duty rules revert to normal on March 31. Is the government going to grant an extension?
There have been plenty of rumours and lobbying by certain groups who wanted the government to extend the stamp duty relief. However, it was announced by the Treasury last month that this isn’t going to happen.
Significant backlogs in work have been created across the housing market by the high volumes of people looking to take advantage of the relief. These are delaying important parts of the process, such as searches and mortgage offers being issued and are being compounded by staff shortages caused by the ongoing effects of the pandemic.
Despite one petition being signed by more than 22,000 people, meaning the government had to respond, the Treasury announced there would be no extension to the relief. The stamp duty holiday was designed to stimulate property market activity temporarily and support the jobs the industry provides – and it certainly had the desired effect!
The relief lifted the starting threshold of stamp duty from £125,000 to £500,000 on July 8 last year. By October, transaction volumes were 8% higher than the same month the year before.
Stamp duty is an important source of government revenue, generating billions of pounds each year to help pay for essential services. Therefore, from April 1, the normal rules and regulations will be back in place.
If you already have a solicitor acting for you, I would suggest you ensure they have everything in place to expedite your purchase and attempt to push it through before the current relief ends. I am sure your conveyancer will notify you if there is any further feedback from the government to suggest the stamp duty scheme will be extended.
I am a first-time buyer, is the government making any stamp duty concessions to help people like me onto the property ladder?
It has been confirmed the treasury will be maintaining the Stamp Duty for First Time Buyers scheme, which lifts the starting threshold for the tax to £300,000 on first property purchases of less than £500,000.
If you have owned a house before, however, you will be liable to pay stamp duty from £125,000 at 2%. It then rises to 5% on the percentage of the purchase between £250,000 and £575,000 and 10% up to £1.5 million. There are higher rates of stamp duty to pay if you are buying an investment property or second home.
All first-time buyers should ensure any conveyancing quotes you receive include the appropriate rate of stamp duty. This is something you will need to factor in when considering costs and the affordability of any new property.
To find out more about the stamp duty rates applicable to your purchase, don’t hesitate to contact me or my conveyancing colleagues on (0114) 218 4000.