Since July 2020 house buyers have been benefitting from a Stamp Duty Land Tax relief scheme, introduced by the Government to help the recovery of the Housing Market following the effects of the COVID-19 pandemic. The Government introduced a relief scheme where no Stamp Duty Land Tax is payable on your primary residence up to the value of £500,000. Any purchase price above £500,000 would be subject to Stamp Duty Land Tax payments at the standard rates.
Elizabeth Harris, Head of Property at Best Solicitors reflects on the effect of this on the property market in South Yorkshire and further afield.
“The introduction of the scheme in July 2020 certainly saw an immediate influx of transactions in our firm. Every client in one way or another has been affected by the impact of the COVID-19 pandemic and have considered their options both personally, or professionally. Our instructions as a firm have more than doubled in comparison to the same time last year. The relief scheme has certainly seen the housing market “boom” and this is reflected in an increase in property values up and down the Country.
Although the relief scheme has done what it said on the tin, there is a fear in the industry that the influx of work will result in a “cliff edge” at the end of the scheme and the housing market may see a substantial depression and this is worrying as a Solicitor in the Property sector, as I am sure is felt by other Property professionals.
My team have seen an influx of instructions from every type of buyer. We have first time buyers, clients upsizing and downsizing together with clients disposing of their property investment assets to crystalise capital in order to ensure that they are in the best financial situation throughout the ongoing pandemic. Although buyers purchasing second properties do not see any substantial benefit from the scheme, we have seen a consistent amount of investment buyers. This is encouraging that clients are still building their property portfolio’s and of course will aid the letting market as we see clients who are disposing of their primary residence to take up renting property.
As I type this article, we are awaiting the Chancellors annual budget and there are mixed feelings on an extension to the Stamp Duty Land Tax relief scheme. The media have recently been speculating on whether the Chancellor will extend the relief scheme as it is estimated that there are currently approximately 100,000 purchasers who will not complete their property purchase before the end of the scheme. Although some in the property industry would welcome any extension, we have to appreciate that for Conveyancers this merely moves the potential “cliff edge” to later in the year. There is talk that the scheme may be linked to the receipt of documentation at the front end of the conveyancing transaction such as receipt of the mortgage offer. This would mean that if your mortgage offer has been received before a set date then you would still benefit from the relief scheme regardless of when this completes. By the Chancellor adopting a scheme of this nature, it may see that the industry has some slight relief in the immediate urgency for matters to complete.
We are advising clients at present that they should account for any Stamp Duty Land Tax payments.
I do hope that the current health of the property industry is sustained, and Best Solicitors will continue to keep our clients up to date on any changes to the relief scheme.”