Much has been written about the SDLT 'holiday' which the Chancellor announced in mid-2020 as a response to the virtual standstill of the conveyancing market which happened during the first lockdown. Originally, the SDLT holiday was due to end on 31 March 2021 but due to a significant overheating of the property market and widespread concern about a so-called cliff edge, the Chancellor announced a gradual return to the normal SDLT rates.
Many believe, however, that all the Chancellor has done is create two new cliff edges namely 30 June 2021 and 30 September 2021. It is already a given that anyone who has not made significant progress with a conveyancing transaction will miss the opportunity to benefit from the rates applicable to 30 June 2021. Until this date, the SDLT payable on a purchase up to £500,000 is zero. After this date, the zero threshold goes down to £250,000 and from 1 October 2021 the zero threshold is £125,000.
However, the question remains for many whether it will even be possible to meet the September 2021 deadline. This could have a significant difference between the amount of SDLT that a buyer has to pay.
Anyone thinking of moving house or who has just agreed a sale or purchase should have a frank and realistic conversation with their conveyancer. It is fair to say that the significant increase in workload has had an impact on the work carried out by conveyancers and they have been subject to criticism as a result. However, sellers and buyers should realise that there are delays in many areas of the conveyancing market including obtaining surveys, agreeing a mortgage offer and the turnaround time for local authorities in relation to producing local searches, which is a central part of the purchasing process.
All sellers and buyers should ensure that they have all relevant documentation which their conveyancer might need including identification documentation and full details of any cash contribution which they will be making towards the purchase. If it is possible to put together an early sales pack which includes a copy of the title and basic information about the property, sellers would be well advised to do so.
However, buyers must understand that, despite everyone's best efforts, it might not be possible to complete before the end of the SDLT holiday. They should budget to pay the higher SDLT which might be payable, to be on the safe side.
Getting realistic, specialist conveyancing advice early in the transaction can only be a good thing for sellers and buyers.
To discuss this or any other conveyancing related matters, please contact us.