Choosing a conveyancer during the stamp duty holiday

Published 20th August 2020

Choosing a conveyancer during the stamp duty holiday

On the 8th of July this year, Chancellor of the Exchequer –
Rishi Sunak – announced temporary alterations to the Stamp Duty Land Tax
(SDLT). This came after month-on-month property enquiries fell from around
100,000 per month in February 2020 to around 40,000 in April, and is intended
to reignite the residential property industry as the UK moves through the
remainder of 2020 and into the first quarter of 2021.

Essentially, this means that any purchase of residential property up to a
value of £500,000 will be exempt from paying any tax. How do these new figures compare
to the previous SDLT regime, and how does this “new normal” situation the
industry finds itself in affect the conveyancing side of things? We’re taking a
closer look below:

Temporary reduced rates

The SDLT holiday will be in effect from 08 July 2020 until 31 March 2021,
giving those who were considering a residential property purchase before the
pandemic a golden opportunity to make good on their plans. The Chancellor hopes
that the increase of the nil rate band for Stamp Duty purchases over £500,000
(which equates to massive financial savings) will attract buyers back to the
market.

New SDLT rates (08 July 2020 – 31 March 2021):

*Image courtesy of Sable International

Previous SDLT rates (03 December 2020 – 07 July 2020):

*Image courtesy of stampdutyrates.co.uk

How conveyancers can assist

While this might be good news for the property market, considering how we
started 2020, a stamp duty holiday doesn’t necessarily mean that buyers are
flocking to market with their cheque books in hand. People are weary, and
aren’t sure how the property purchase process has been affected by the COVID-19
pandemic.

For this reason, reluctant home buyers should consider partnering with
conveyancers who know the law and who are confident in their ability to
complete property transactions at this time in history. A large spanner in the
property market works is that physical property inspections are challenging.
However, contracts can still be exchanged and purchases can still be finalised
at this time.

In situations where the property is not occupied, transactions can
continue as normal and buyers can move in as and when they see fit (as long as
they adhere to all social distancing regulations). However, if a property is
occupied at the time of sale, it is recommended that parties involved defer
completion and property exchange to a later date (when social distancing
regulations are not likely to still be in effect).

If contracts have already been exchanged, parties should agree on a
completion deferment. If contracts are yet to be exchanged, the transaction
should be delayed where possible and all risks of completion should be
considered before proceeding.

Risks of exchanging contracts

As mentioned above, parties should be
willing to sit at the negotiation table and plan the property sale so as to
accommodate all involved. However, not all buyers are able to delay their
purchases – just as not all sellers are willing to wait for their money. Should
an agreement not be possible, and the original completion date (as stipulated
on the contract) cannot be met for whatever reason, the following risks are
carried by the defaulting party:

Buying or selling a property in the year of
COVID-19 doesn’t have to be a frightening undertaking. Get peace of mind by
partnering with property professionals who change with the times, and who will
look after your best interests as you buy or sell a property in these terribly
uncertain times.

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