Stamp Duty Holiday was implemented by Rishi Sunak to provide support to those who have been affected by the ongoing pandemic. Stamp Duty Land Tax, a levy applicable in England and Northern Ireland, must be paid on property or land over a certain price. But with COVID-19’s effects continuing, Mr Sunak has set the threshold at £500,000 until March 31, 2021.
He said: “This idea that whether you complete your house purchase on March 31, or April 1, is an odd one – I believe the holiday should be extended, and I have been vocal about that.
“It literally will be a huge April Fools – you’ll be told ‘unlucky!’ even if you are an hour late on completion, and could have to pay thousands. It is really that black and white.
“This is putting the market under a lot of unfair pressure – if we have a customer, and for whatever reason they don’t complete on the day they expected, which happens all the time, then we’re in this horrible position where we’re going to face huge criticism for something we aren’t in control of. Buying a house is just not an exact science.
“The idea of the holiday simply starting and stopping on a given day is a hard one to deal with and it doesn’t make a lot of sense given the way in which property transactions complete and the ever-moving exchange and completion dates which are often involved.”
The impending deadline could cause chaos for the homebuyers who are queuing up to benefit from the deal on offer.
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As such, Mr Hayes has said the matter must be looked into as a point of urgency, and has encouraged the government to do more.
He said: “I believe the government should be thinking about how they are going to handle the hard stop they’ve currently got in place.
“They should also see whether they could potentially give the deadline a slight shift – is there something we get in place like a letter of intent to purchase the property before the date to provide a window of an extra period of time to get the mortgage complete?
“If the letter of intent was signed by both parties up to March 31, this could mean they could benefit from the stamp duty.
“It’s a simple piece of paperwork without excessive legalities that can just be filed without worries, and help people to take advantage of the stamp duty holiday.
“In that instance, then, it isn’t bad – everyone would recognise that it is on the customer to ensure they have done everything they possibly can to get an offer accepted, and tell everyone they want to buy it.
“If you have, then great, but if you haven’t then you won’t benefit. After that, it will leave the other parts of the industry to get mortgages complete over a realistic period of time.”
Mr Hayes drew attention to the fact the government has recently changed the terms of support measures such as furlough.
With dates changed, and measures of support altered, he posed whether a similar approach could be taken to the Stamp Duty Holiday.
While he acknowledged the scheme would eventually have to stop, he encouraged the government to consider a less stark approach.
He went on to warn there are applications currently in the pipeline which could end up missing out on the holiday.
For those who do wish to secure the benefits of a Stamp Duty Holiday, there is limited time available.
Mr Hayes concluded: “If you want to take advantage, you absolutely need to think of acting now, this side of Christmas, and even then it’s probably going to be very tight – act now or risk missing out.
“All of your ducks have got to be in a row. Engage with your mortgage broker as early in the process as possible, get your documents all in order.
“You will need three months of bank statements, three months of payslips, and up to date proof of address and a valid form of identification – without these you could delay the process by two or three weeks.
“If you’re self-employed, make sure you have up-to-date tax information and that you’re registered on HMRC.
“All of this is about preparing, but it’s also about picking a really good solicitor – one who might not have a significant backlog, and you should ask how likely it is they will get the transaction over the line.
“Everybody has to play their part and it is super critical for everything to be ready and to get things out ASAP.
“Unfortunately, there are some non-avoidable things and outside factors which may have ramifications, but putting in the leg work is important.”