The Stamp Duty Deadline is Fast Approaching – So Act Now To Avoid Losing Out
According to property website Rightmove as many as 100,000 home buyers could get a massive unexpected tax bill if the Government’s temporary ‘holiday’ from stamp duty ends as planned on 31 March.
A report in The Guardian reveals that homes are taking longer to sell because of delays in the process – mainly conveyancing, surveys and valuations. The average time time taken from when an offer is accepted until legal Completion is currently just over 4 months. Rightmove estimate that a total of 613,000 property sales agreed in 2020 are ‘stuck in a logjam’.
There’s a lot at stake. Purchasers who manage to complete by the 31 March deadline will reap big savings – as much as £15,000 for someone buying a £500,000 property. But if you can’t complete in time the potential bill would be that same amount, which for an average-priced property would mean having to cough up between £2,000 and £3,000. The previous stamp duty threshold for home buyers was £125,000.
It is hoped that the Government will extend the stamp duty deadline. Otherwise it’s not just bad news for buyers – sellers too are likely to suffer because unhappy buyers stuck with a unexpected tax bill may be tempted to ‘gazunder’. ‘Gazundering’ is where a buyer unilaterally decides to reduce the agreed price at the last minute just before Exchange of Contracts (the stage when a sale becomes legally binding).
Most buyers will have already factored in the stamp duty saving, and if it turns out they can’t complete in time they will suddenly need to find several thousand pounds out of nowhere – or ‘re-negotiate’ the agreed price.
Normally a standard time period of 2 weeks is allowed between Exchange and Completion, although legally this can be any amount of time that the buyers and sellers agree – longer or shorter. You can even Exchange and Complete on the same day if all parties agree.
Our next blog – coming soon …….
Deciding what’s included in your sale
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