Law Firms’ Conveyancing Departments will have welcomed the Chancellor’s announcement last week of a Stamp Duty Land Tax holiday of almost 9 months, hoping that it will provide impetus to the housing market to enable furloughed staff to return to work. Equally welcome was HMRC’s swift publication of its guidance, on the temporarily reduced rates, making it clear there is a limit to Rishi Sunak’s generosity, https://www.gov.uk/guidance/stamp-duty-land-tax-temporary-reduced-rates
The 3% surcharge still applies, so buyers of second homes and other additional dwellings costing up to half a million pounds will have to pay some tax.
The residential property market has seen a surge in activity since the beginning of June, as the relaxation in lockdown allowed house viewings once more and made new marketing easier. Pent up demand from the previous 3 months has led to a rush of new instructions, supplementing the resurrection of transactions which stalled or fell through at the beginning of March.
Whether a reduction in SDLT will prove sufficient to sustain market activity over the coming months remains to be seen. Many mortgage products which would appeal to first time buyers have been withdrawn during lockdown, so it may not be this sector of potential buyers who are best placed to take advantage of the temporary tax cut.
One thing, however, is certain. For Conveyancers, the closer we get to 31st March, the more the SDLT “holiday” will seem like a curse rather than a blessing, as they struggle to manage the expectations of clients who don’t want to miss out on significant tax savings, no matter how close to the deadline they find the property they want to buy. The pressure and stress is likely to leave Conveyancers in need of a good holiday themselves.
Stephen Mahoney, Partner Porter Dodson Solicitors & Advisors