Experts warn thousands of buyers will miss the stamp duty holiday deadline – what you can do
THOUSANDS of people trying to buy a home could miss out on the stamp duty holiday thanks to conveyancing delays.
The average time taken for homebuyers to complete on their sales is up 6% compared to this time last year, Property Industry Eye reports.
These delays could cause families to miss the fast-approaching stamp duty holiday deadline, costing them thousands of pounds.
For people selling their homes, it could mean buyers pulling out just weeks before completion, causing knock on effects for anyone in a chain.
The data comes from TwentyCI who have been tracking completion times among the top ten largest estate agents in the country.
The Guild of Property Professionals said that the delays are happening between when a property is registered as Sold Subject to Contract to when the sale is completed.
On average, the time taken to complete has risen from 106 days to 121 days.
Iain McKenzie, CEO of The Guild of Property Professionals told Property Industry Eye: "This increase will once again put pressure on buyers who hoping to meet the new stamp duty holiday deadline at the end of June.”
The stamp duty holiday was introduced by chancellor Rishi Sunak to give the property market a boost throughout the Covid pandemic.
What is stamp duty?
STAMP duty land tax (SDLT) is a lump sum payment anyone buying a property or piece of land over a certain price has to pay.
Up until July 8 2020, most house-buyers in England and Northern Ireland had to pay stamp duty on properties over £125,000.
This was temporarily increased to £500,000 until March 31, 2021 in the government's mini-Budget in July 2020.
The Chancellor extended the help until September 2021 in his Spring Budget.
The holiday will last in full until June, before being reduced to £250,000 from July.
The rate a buyer has to fork out varies depending on the price and type of property.
Rates are different depending on whether it is residential, a second home or buy-to-let, or whether you're a first-time buyer.
The usual system in England for residential properties means:
- First-time buyers pay nothing on properties below £300,000 (and relief available on properties of up to £500,000)
- You pay nothing if the property costs below £125,000
- You pay 2% if it is worth between £125,001 and £250,000
- You pay 5% if between £250,001 and up to £925,000
- You pay 10% if it is between £925,001 and £1.5million
- You pay 12% on anything over £1.5million
For second homes or buy to let properties:
- 3% on purchases up to 125,000
- 5% on purchases between £125,001 and £250,000
- 8% on purchases above £250,001 and £925,000
- 13% on purchases above £925,001 and £1.5 million
- 15% on purchases above £1.5 million
Stamp duty rates are different in Scotland and Wales.
Tax on the first £500,000 of a home purchase has been scrapped thanks to the initiative, which was launched last year.
Originally the deadline was supposed to be March 31, but it was extended after experts warned that 100,000 property sales from falling through.
Now, the stamp duty holiday is due to come to an end on June 30 2021. From July, the tax-free threshold will drop to £250,000 for home buyer until September.
It'll then return to its normal limit at £125,000 from October.
There's just 74 days till the June 30 deadline, meaning lots of properties still trying to complete could miss out on the savings.
If a first-time buyer bought a property for £500,000 before then, they'd save £10,000 in stamp duty, Peter Gettins of mortgage broker L&C Mortgages, told The Sun.
If you're in the process of buying a house, you should make sure you have enough cash to pay the stamp duty, in case you can't make the deadline.
Miles Robinson, head of mortgages at the brokers, told the Sun:
"We must also advise that those looking to buy a new home should make sure they budget enough to pay the stamp duty land tax just in case the purchase does not complete before the deadline.
"If a buyer were to pull out after they’ve already exchanged, sellers may be in a position to sue for consequential loss at this point, and buyers may lose their deposits."
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