Jane Riley discusses how to Prepare in Advance for the Stamp Duty Holiday Deadline.
How will the end of the Stamp Duty holiday on 31 March 2021 affect you and your move?
For most people, you will not pay Stamp Duty Land Tax (SDLT) if your purchase price is £500,000.00 or under so long as you complete the purchase on or before 31 March 2021. It is possible that the government will extend the stamp duty holiday but at the moment that seems unlikely so if completion cannot take place by the 31 March 2021, SDLT is going to be payable.
Can you afford to pay stamp duty or will you have to pull out?
The conveyancing market is very busy at the moment and COVID has affected the process as there are delays in obtaining local authority searches, getting surveys and mortgage offers. The average time for a conveyancing transaction is taking longer at the moment and 20 weeks is not unusual.
Whilst your conveyancer will do everything they can, please note not everything is within their control particularly where there is a chain and they cannot guarantee that your purchase will complete by the deadline of 31 March 2021.
If you have a mortgage, we will need to have everything in place including all searches, mortgage offer and signed documents before we can exchange and most lenders need at least 5 working days’ notice to release funds. Everyone in the chain also has to be ready as well.
Please note that it is likely that we will not want to rely on completions right up to the deadline of 31 March 2021 as it is not unknown (whilst relatively rare) for completions to be delayed because of problems with funds arriving on time.
SDLT is calculated on the day of actual completion so if completion does not happen on the 31 March 2021 even though that was the contractually agreed completion date, you will have to pay SDLT at the normal rate as the stamp duty holiday no longer applies. Easter is often a busy time of year for completions in a normal year and March 2021 will be far from normal. It may be difficult to book a removal company for example because of the sheer number of people moving house.
You may therefore have to be realistic about the chances of completing within the SDLT holiday and budget for paying the stamp duty just in case.
As I mentioned earlier, here at Kerseys Solicitors myself and my Residential Property team will do everything that is within our power to push the purchase of your property through to complete in time, but we are reliant on local authorities for the return of searches and mortgage companies to process your mortgage offer along with surveyor’s reports. Therefore planning ahead and communication is key to all parties up and down the chain.
Our instant online quote tool will provide you a quote which now includes SDLT on your purchase, we want our clients to be prepared for all scenarios and allow you to plan if SDLT becomes payable. If the government does decide to extend the SDLT holiday period (which does not look likely at the moment) at the last minute then the SDLT fee on your quote will not be payable but we want you to be prepared for all scenarios.
If you have any concerns please do not hesitate to your Conveyancer, contact us at [email protected] or telephone your conveyancer on their direct dial or our switchboard on Ipswich 01473 213311 or Colchester 01206 584584, alternatively if you would prefer us to call you please visit our web site and click “Call Me Back”.