Ensuring sweet memories of the stamp duty holiday
With less than two months to go until the temporary stamp duty exemption for first time buyers comes to an end, many looking to make that first move will be wondering how it will impact on them.
Here, Carole Fox, head of residential property at Nottingham law firm Rothera Dowson, explains the change and highlights why moving fast will save thousands.
First time buyers have been enjoying a stamp duty holiday for just under two years now. However, that is all set to come to an end on 24 March. This is the last day that the suspension on stamp duty will be valid for those venturing onto the property ladder for the first time and buying a property priced between £125,000 and £250,000.
After that date, normal proceedings will resume and properties in that price band will once again be subject to a 1% charge, payable to HMRC. 1% may not seem like a particularly large figure but for many, every penny really does count at the moment, and the sense of urgency to beat the deadline is fully understandable.
Many hoped that the exemption would be extended beyond March as it has played a part in helping to get the property market moving again, albeit slowly. However, the Chancellor ruled out an extension back in November. So, with the holiday most definitely coming to an end, first time buyers need to be clear on what they need to do in order to make a saving.
One of the main causes of confusion is exactly what stage of the buying process you need to be at by 24 March to avoid paying stamp duty. This is something that I’ve received countless enquiries about in the past few months. The answer is simple – you must have completed by this date. Some people seem to be under the impression that by simply exchanging contracts, you will have done all you need to do. Sadly that is not the case and people really do need to act now to ensure that the required completion is achieved.
Is it an impossible task to have reached that stage by 24 March? Well, it may be cutting it fine, but I believe that having the correct team in place is crucial. A proactive solicitor, a dynamic and hungry estate agent and a prompt mortgage adviser are all vital. A bit of chasing on the part of the buyer may also be needed to ensure that everyone is working to speed and working together.
Although the property market is unpredictable, first time buyers usually have the benefit of being in a pretty short chain, which we all know can be a blessing. With this in mind, I would expect those people that are proactive and seek out the right advisors to be the ones settling in to their new homes, having avoided the dreaded stamp duty, by the time the deadline passes.
For further residential property legal advice from Rothera Dowson, visit rotheradowson.co.uk.