Chitra Jeebodhun, Property Solicitor at F Barnes looks at the Stamp Duty Land Tax - What will happen now?
Will the Stamp Duty Land Tax Holiday 2021 be extended?
Over the last few months property buyers have been able to benefit from either paying no stamp duty (up until end of June 2021), to a significant lower sum of stamp duty on property purchases (up to the end of September 2021). During this period Britain has been emerging from the economic impact caused by various National Lockdowns. The introduction of the 'Stamp Duty Holiday' was the Chancellor’s idea to stimulate the housing market and create jobs.
After a frantic few months for Property Solicitors and Conveyancers across Britain, the Stamp Duty Holiday period has come to an end. Whilst a large number of property buyers have taken advantage of both June (initially due to end in March 2021) and September relief, it remains debatable whether this was a success or failure. For Property Law Firms and certainly F Barnes Solicitors, it remains business as usual.
Why do I need to pay Stamp Duty Land Tax?
Stamp duty is a significant tax imposed by the Government and is charged when you purchase any Property. Regardless of whether there is anything to pay at all, it is compulsory that an application is made with the HMRC within 14 days of completion in order for them to issue a certificate. Without this, your interest in the Property will not be registered. You may wish to visit the Government Website for more information.
The only other way to avoid such tax, is to not move at all, however we know that this is not possible for many. There is always a demand in the housing market, people wish to move to larger or smaller homes or move to a different town or city. What has become commonly accepted, is that the Corona Virus pandemic has resulted in a change in the way we live our lives, work and socialise. It has affected our choices of where we want to live and what type or size of home we now need. For many their priorities have changed.
Can I still benefit from any Stamp Duty savings at all? Can I avoid paying Stamp Duty?
Following the end of the Stamp Duty Holiday, firms have returned to the pre-pandemic position offering some reliefs in certain circumstances and the normal tax rate applies as follows:
- First Time Buyers can obtain a relief on property of up to £300,000.00 and no tax is payable.
- First Time Buyers also are able to pay only 5% in stamp duty in excess of £300,000.00 up till £500,000.00.
- Home Movers can obtain relief of up to £125,000.00 and no tax is payable.
If the above rate bands are exceeded, you will be liable to pay stamp duty at normal rates. Your Solicitor or Conveyancer will be able to provide you with calculations and submit your application on your behalf, when you purchase a property. There are Stamp Duty Tax Calulators to assist also.
What if I already own a property and am buying another without selling?
Stamp duty will be higher on additional properties, this has not changed. If you wish to buy another property, you will be liable to pay Stamp Duty up to £40,000.00 which is almost always applicable for properties in or around London.
What is the Property Market like post SDLT holiday?
At F Barnes Solicitors we are business as usual. The rush may have slowed down compared to the last few months however the housing market remains booming and F Barnes continue to attend to its various clients selling and purchasing their new dream homes or expanding their property portfolios.
At team 'F Barnes' we have enjoyed the challenge of getting everyone where they wanted to be, it has been an incredibly busy time with all of our property team working flat out, but is has been worth it.
What we have learned a valuable lesson however. It has become very clear that our clients have preferred the personal service we give compared to our competitors. At no time before was it more evident that in order to have a chance of moving when you want, into the right home for you, you needed that special person acting on your behalf to guide you through.
There are a lot of firms out there who work using automated case management systems and workflow processes, relying on technology and a pool of people working on one case but these have fallen behind on delivery during this period. Budget property solicitors are clearly not the answer if you want the job done in the way you would like it done. Many were disappointed and the stress appointing a budget solicitor brought was considered something we felt they could have avoided.
It definitely made a difference to our clients that our business model is a 'traditional one'. We were pro-active, communicative and above all cared for each and every one of them. We have definitely appreciated the heartfelt feedback in our client reviews which makes our job so worthwhile.
Is there still a Christmas rush to move ?
F Barnes see no real change in the demand for moving before Christmas. We are now gearing up to get our clients moved in time to put up their Christmas trees. Whilst this is traditionally a busy period for all firms, it is especially different this year as we look back on Christmas 2020 and remember what this held for each and every one of us. We are so pleased that we are moving forward to what should be a brighter and happier festive season.
If you are thinking of moving home, expanding your property portfolio, auctioning plots of land, or need a leasehold extension please do get in touch. You will speak to one of our experienced team of legal advisers who can guide you through the process, costs involved and the likely timescales.
T: 01708 333711