Stamp Duty Land Tax (Temporary Relief) Bill
The Stamp Duty Land Tax (Temporary Relief) Bill has now received the green light in the House of Lords and awaits Royal Assent. The bill formalises the current Stamp Duty Land Tax (SDLT) arrangements which were originally introduced by the short-lived government of Liz Truss. These measures are expected to now last until 31 March 2025.
No consultation has taken place for these reforms. The aim of the Bill is essentially to reduce the cost to buyers, especially first time buyers, by assisting in making savings on the SDLT payable on the purchase of residential property.
In short, the Stamp Duty Land Tax (Temporary Relief) Bill has three main measures: –
- To increase the nil rate threshold for Stamp Duty Land Tax from £125,000 to £250,000 on residential properties (the 3% high rate on additional dwellings will remain)
- To increase the nil rate threshold for First Time Buyers’ from £300,000 to £425,000
- To increase the maximum purchase value for First Time Buyers’ Relief from £500,000 to £625,000
Residential conveyancing departments up and down the country are seeing a slowdown on new instructions. In many instances, high interest rates have resulted in delay in the completion of chains where mortgage offers have expired post the mini budget, because it has become more expensive for buyers to borrow the same mortgages based on their affordability.
The market has now shifted so that sellers are no longer in the driving seat compared with just a few months ago when it was a sellers’ market. Offers were being made and accepted for properties well above the asking price. Now agents are claiming that securing a sale is becoming far more difficult.
It is unclear whether the ongoing reliefs will indeed help buyers or whether it will inevitably be overshadowed by high interest rates. Hence, any SDLT savings could potentially be wiped out by the high cost of borrowing.
The exact amount of SDLT is circumstance based. Buyers therefore face paying differing amounts of SDLT depending, for example, on whether they are purchasing a residential or non-residential property, whether they are a first time buyer or subsequent buyer, whether they are resident or non-resident of the UK, whether they will own two or more properties on completion and whether they are purchasing through a company or as an individual.
The Wilkes Partnership are able to assist you with selling and purchasing a property. If you have any further questions on what the new stamp duty thresholds mean for you or would like advice on another residential conveyancing query, please contact Asia Bi, Solicitor on [email protected] or call 0121 733 8000.
