Land Transaction Tax & Stamp Duty Holiday
- November 11, 2020
- Posted by: hopkinslaw
- Category: Property Law
Buyers seeking a new home are being encouraged to start their search to be sure of saving money under the Land Transaction Tax / Stamp Duty holiday.
The Land Transaction Tax threshold is currently £250,000 for property sales in Wales whilst the Stamp Duty threshold is £500,000 for England and Northern Ireland, until 31 March 2021. Buyers completing on a main residence ( where they will only own one property on completion) costing up to that amount before then will not pay any Land Transaction Tax ( Wales) Stamp Duty ( England and Northern Ireland) and more expensive properties will only be taxed on their value above the threshold.
Research by Legal & General Mortgage Club, which surveyed housing market advisers, conveyancers and estate agents, suggests homebuyers need to act fast to take advantage of the temporary benefit, however.
It found the average purchase from finding a property to completion is taking at least 15 weeks, four months, as processing times for mortgage applications have doubled due to high levels of demand.
Even without a second lockdown, homeowners should avoid delaying beyond November 1st to use the Land Transaction tax/ stamp duty holiday.
Since the re-opening of the mortgage market, around a third of advisers have found a mortgage application for a client with straightforward circumstances is taking three to four weeks, and a further 32 per cent say it is taking four to eight weeks.
Before the pandemic, for most buyers (61 per cent) in simple cases this process took less than two weeks to get to a mortgage offer.
In a third of cases those with more complex backgrounds, such as those with impaired credit histories or who have been on furlough, need to allow up to six to eight weeks to get approved for a mortgage.
Other parts of the housing sector are also reporting delays as they try to manage demand and the ongoing impact of Covid-19 on their businesses.
Estate agents also indicated the average time between receiving an offer on a property and completion has increased by some eight weeks.
Roberts adds that policy makers need to consider if a tapering of the Land Transaction Tax / Stamp Duty deadline is needed instead of a hard deadline.
“We need to avoid those moving or purchasing a home missing out through delays after 31 March when the holiday ends,” he says.
Contact our Property Law Team for expert advice when moving home.