We have all just heard the long-awaited words of the Chancellor of the Exchequer, Rt Hon Rishi Sunak MP. Between the hesitation caused by Brexit, the Boris Bounce and the COVID “corona-coaster”, anyone who has even the slightest interest in the United Kingdom property market was looking at this budget with great interest.
It is just been announced that, with immediate effect, HM Government will be eliminating Stamp Duty Land Tax (SDLT) on all transactions that fall below £500,000. This stamp duty holiday is set to be in place until 31 March 2021. The Chancellor stated that he wanted to boost jobs in the sector and improve confidence of buyers and sellers, and his holiday is certainly a way to achieve this.
While this is undoubtedly good news for the average buyer, there are still some questions that need to be asked. The first that comes to mind is in relation to how this stamp duty holiday will interplay with the 3% SDLT surcharge. Under normal circumstances, if an individual is purchasing a property which results the owning two or more homes at the end of the day, they have to pay an additional 3% on top of the usual SDLT rates. Does this now mean that anyone can buy a second home under £500,000 and pay nothing? We will need to see the fine print.
The formal guidance, and legislative framework, for this SDLT holiday are still awaited. But regardless of the legal minutiae, this will be a welcome relief to a house buying public who are looking for some good news.
For the people that have already exchanged contracts, but have yet to complete, the question is whether they can take advantage of this? In the past, HM Government has allowed people who have exchanged but not yet completed during a transition of SDLT to decide which scheme they wish to be taxed under. While it’s not readily apparent who would elect to pay SDLT at this moment, it is an option available to those who wish it.
Our SDLT is always a valuable source of revenue for HM Treasury, we here Bishop and Sewell are very pleased about this means the average buyer.
If you are thinking of buying a property, or if you have any questions on SDLT please call 020 7631 4141 and ask for a member of the Property team or email mail@bishopandsewell.co.uk.
Charlie Davidson is a Solicitor in our Property team, dealing with both residential and commercial property.
This article is intended as a general summary on the law and current events– no reliance should be placed on it. The above is correct as at 8 July 2020. The information above may be subject to change as this is a constantly evolving situation.
The content of this note should not be considered legal advice and each matter should be considered on a case by case basis.
