Phase 1 of the Stamp Duty Land Tax Holiday is looming and ends on the 30th June 2021.
Phase 2 applies between 1st July 2021 and 30th September 2021. During this period the nil rate band will be reduced from £500,000 to £250,000 meaning that SDLT will be payable on the amount (paid for a property) that exceeds £250,000.
If your purchase is not completed before the 30/09/21 you will not be able to take advantage of the partially reduced rate. From 1/10/21 rates return to their pre 8th July 2020 levels. It will not be sufficient to have exchanged contracts by these dates – completion must have taken place.
We always do our best to try to ensure conveyancing transactions proceed as quickly and efficiently as possible. However at the moment we are experiencing particularly high volumes of conveyancing instructions and we are also working in the environment created by the pandemic and everything that entails. Many people are still working from home and that does not help the conveyancing process. Equally staff have been furloughed in some businesses involved in conveyancing. Transaction are inevitably taking longer than normal.
Furthermore in all conveyancing transactions in normal times ( let alone a pandemic) situations arise that cause delays outside of our control or result in people withdrawing from transactions.
Finally, these concessionary rates do not apply to all purchases , for example different rules apply to purchases by limited companies, buy to let (e.g. investment purchases) second home purchases and non UK residents.
For all these reasons we wish to make it clear to you at the outset of your purchase , that whilst we will do our best to ensure your transaction is completed in accordance with your instructions, we cannot in any circumstances give any guarantee that completion can or will take place before the end of the Stamp Duty “Holiday”.
From 1st October 2021 onwards the nil rate band returns to its pre 8th July 2020 rate of £125,000. SDLT will apply to anything over this figure (with the exception of First Time Buyers).
To read the full Government guidance notes go to https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates
If you would like any further information please contact our office and speak with one of our residential conveyancing team members who will be able to assist.