The threshold at which stamp duty land transaction tax (SDLT) is payable was increased to £250,000 in 2010 for first time buyers. This meant that so long as the property being bought was for £250,000 or less, no stamp duty was payable. However this will end on 24 March 2012. Anyone buying a property after that date will have to pay stamp duty at 1% on any purchase price over £125,000 or 3% for properties worth between £250,000 and £500,000.
As SDLT is payable within 30 days of the “effective date of the transaction”, buyers will have to have completed their purchase on or before 23 March 2012 ( the last working day before the end of the deadline). The effective date is the earliest of completion or substantial performance of a transaction. Substantial performance is defined by the Inland Revenue as being when the buyer takes up occupation of the property or pays a substantial amount (90%) of the purchase price. An exchange of contracts will be not enough.
We will do our best to ensure that any transactions affected by the change in SDLT complete on or before 23 March 2012. However when a buyer is in a conveyancing “chain” where not everyone is ready, this may not be possible.