End of the SDLT holiday #SolicitorChat with The Law Society.

If the stamp duty land tax (SDLT) holiday ends suddenly, thousands of transactions could fall through at the last minute, leaving people stranded and out of pocket. If you’re in the process of buying a property, do you know how you could be affected?

Thomas Healy provided answers to these and more live on Twitter this morning during #SolicitorChat.

Join The Law Society and other firms discussing on Thursday mornings 0900-1000.

Does the SDLT holiday apply from the exchange date or the date of completion? 

Generally, for conveyance contracts governing a land transaction, SDLT will be chargeable on completion. But where such a contract is substantially performed before it is formally completed, the contract is treated as if it were itself the transaction provided for in the contract. SDLT therefore may be due on exchange in instances where a contract is substantially performed. This may be where the purchaser obtains “the keys to the door” and is entitled to occupy the property or when the purchaser of a building that is let becomes entitled to receive the rent.

Will I incur SDLT if my property purchase is not completed by the deadline?

Last summer the government temporarily increased the amount at which stamp duty is paid to £500,000. This ‘holiday’ was extended until 30 June. After this date, the starting rate of stamp duty will be £250,000 until the end of September. Stamp duty will then return to the usual level of £125,000.

What should I do if I can no longer afford the property once SDLT is added to the cost?

In this instance, if you have not budgeted for the increased SDLT cost, you could potentially have a discussion with the agent about a reduction in the purchase price to make the house more affordable. We would always recommend budgeting for all potential costs before starting the conveyancing process.

Will I be liable for any costs if I pull out of a house purchase as a result of the SDLT holiday ending?

You will likely have your own legal costs, any costs associated with your mortgage, such as surveys, search costs. It also depends on the stage at which you pull out. If you pull out after exchange, you may lose your deposit if you cannot complete. 

What if localised coronavirus has delayed my transaction from completing in time, can I be exempt?

There are no exemptions to the current SDLT holiday. 

If you require any further information from any legal services, please contact any of our teams, whether individual services or business services.

The contents of this article are intended as guidance for readers. It can be no substitute for specific advice. Consequently we cannot accept responsibility for this information, errors or matters affected by subsequent changes in the law, or the content of any website referred to in this article. © Mundays LLP


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