On 8th July our Chancellor of the Exchequer, Rishi Sunak, announced a Stamp Duty Holiday which could save home buyers a staggering £15,000 in Stamp Duty Land Tax (SDLT). It’s a bold move that is intended to boost the property market during these unpredictable Covid-19 times and will see all home buyers whose purchase price is between £125,000 and £500,000 make a saving.
But be warned, good things must come to an end and on 31st March 2021 the Stamp Duty will return to the usual pre-Covid rates. You may think you have plenty of time and whilst some property purchases can complete is super-fast time there are many steps that must be ticked off before completion can take place and any of these steps could hit hurdles that delay the process and ultimately result in a completion that occurs after the SDLT holiday and therefore costs you your saving.
It’s commonly quoted that the average time to complete on a property purchase is 12 weeks and although some solicitors are proud to have a timescale far shorter than this we exercise caution when it comes to specifying a timescale. 12 weeks (or three months) from today doesn’t leave very much leeway on the plan before the 31st March 2021 deadline and if your budget is tight then any delays which result in completion occurring after the deadline might mean a make or break situation where additional emergency finance is needed to fill the void between the property purchase price, your approved mortgage and the Stamp Duty bill payable to HMRC.
“There is still time to cash in and benefit from the SDLT holiday”
But there’s no need to panic! There is still time benefit from the SDLT holiday. Here are our top tips on how you can still cash in and make some serious savings when buying your new home.
- If you are planning on buying a new home and wish to take advantage of the Stamp Duty Holiday then it’s advisable to act now. The whole process from start to finish can take on average 12 weeks and this doesn’t factor in the increased workloads at the local authority and other departments which from our recent experience is resulting is delays getting searches back. The sooner we can submit your request for searches to be completed to sooner we will receive them and this will put us in good stead to complete prior to the 31st March 2021 deadline.
- If you are dependent on the sale of your property to release funds to buy your new home then get it on the market now. The property market is booming right now and property seems to be selling fast however this doesn’t mean we can be complacent. According to the experts the Market Date for a property is 26th September. This is the date you should have your property on the market to allow time for it to be marketed by your Estate Agents, viewed by prospective purchases, offers received and accepted and for the whole sale process to complete before the 31st March 2021 deadline.
- If you are looking to buy a new home and are in need of a mortgage to make it a reality then it’s wise to go get a mortgage offer immediately. Knowing a) what you can afford and b) that you can indeed borrow that amount ahead of searching for a new home will certainly speed up the process. Speaking to a Financial Advisor will really help in getting your mortgage offer fast so that you can view properties that are affordable and avoids wasting time viewing properties that may be financially out of reach.
- If you are selling your property (to enable a purchase) then think back to when you purchased it. Were there any complications such as access rights? If there were and you have communications relating to these then dig them out in readiness to present to your solicitor. This will likely help in speeding up the process. If the property is leasehold then grab a copy of the lease. Think about making a folder containing such documentation and include things like FENSA certificates for replaced windows, your EPC certificate, any certificates relation to any building works or alterations.
- Many but not all property transactions form part of a chain. Where there is a chain, you are reliant upon every single part of the chain being ready to complete before you can complete and this means that, to a large extent, making sure you complete before the SDLT Holiday deadline is out of your hands. Maybe consider a property that is part of a small (or ideally no) chain to improve the chances of a timely completion.
Finally, it might not go to plan and you may find yourself facing a large tax bill should completion occur after the deadline. If this were to happen and you are still set upon completing on the home of your dreams then it may be sage to ensure you have back up funds available to cover such a bill.
