Is it the end or just the beginning for Stamp Duty changes?
With the Stamp Duty Land Tax (SDLT) holiday end date in sight, it’s worth noting that from 1 April 2021 there is the introduction of a new rate of SDLT for non-UK resident buyers of residential property in England and Northern Ireland. Although official guidance has not yet been issued, the current proposals are as follows:-
- There will be a 2% surcharge on the current SDLT rates that apply to purchases made by UK residents (the current SDLT rates can be found at: https://www.gov.uk/stamp-duty-land-tax/residential-property-rates).
- The surcharge is payable on all freehold and leasehold property as well as on rents on the grant of a new lease.
- The surcharge will apply to land transactions with an ‘effective date’ (completion) of 1 April 2021 or later.
- If contracts are exchanged prior to 11 March 2021, but complete or are substantially performed on or after 1 April 2021, transitional rules may apply.
- As above, transitional rules may also apply where a contract is substantially performed on or before 31 March 2021 but does not complete until 1 April 2021 or later.
- The rationale behind the surcharge is to help make house prices more affordable for UK residents and assist people to get onto/move up the housing ladder. The revenue raised will be used to tackle homelessness and rough sleeping. However the introduction of the surcharge could dissuade overseas buyers, resulting in a reduction in demand for certain types of investment property.
There will of course be a continued push to complete transactions before the SDLT holiday ends. However, it is particularly important to complete before this date if you are an overseas buyer.
The government announced the third lockdown for England on the 4th January but house moves are permitted, despite the onerous restrictions on the rest of our lives. There is national guidance on moving home safely which should be adhered to – and it’s vital that people outside a household or support bubble do not assist with a house move unless absolutely necessary.
There’s no doubt that meeting the SDLT deadline will be a challenge during a lockdown. At Bolt Burdon, exceeding our clients’ expectations is our main priority and we are prompt, personable and, most importantly, proactive in our approach. We cannot guarantee that completion will take place before the deadline of 31 March 2021 (because of the reliance on third parties), but we can guarantee that we will push for completion to take place as soon as possible.