A housing developer is offering buyers a chance to save by extending the Government’s Stamp Duty Land Tax (SDLT) holiday.
With SDLT holiday due to end on 31st March 2021, Galliard Homes has decided to extend the SDLT holiday, that was introduced by the Government in July last year, on selected developments – meaning buyers will be able to take advantage of the Stamp Duty Holiday discount until 1st October 2021.
From now until 31st March 2021, Galliard Homes confirmed that buyers will be “completely exempt from paying Stamp Duty on a property up to the value of £500,000 at a selection of Galliard developments thanks to this Government incentive”. But that those buyers who own multiple properties would still have to pay the 3% Higher Rates on Additional Dwellings Charge.
However, Galliard’s SDLT incentive only applies “to properties reaching legal completion between 1st April 2021 and 1st October 2021. In the event that Stamp Duty Land Tax rates are varied or amended by the UK Government, this incentive only applies to SDLT rates as at 7 July 2020, i.e. one day prior to the current SDLT ‘holiday’.”
Despite conveyancers call for urgent extension to SDLT holiday along with MPs writing a letter to Rishi Sunak echoing their demands more recently, the chancellor has so far ruled out extending the tax break which he introduced in the summer of 2020.
With the nine-month stamp duty holiday due to end in March this year, Mr Sunak is standing firm on his decision not to prolong it. But according to a tax expert, those buyers wanting to purchase new build property could benefit if they act now.
Sean Randall, a partner at tax and advisory firm Blick Rothenberg, explains that those acquiring new build homes may be able to legitimately “lock in” to the stamp duty benefit by paying the first instalment of ground rent before 1 April 2021. He said:
“Efforts are being made to persuade Mr Sunak to extend the stamp duty holiday which is worth up to £15,000 per property.
“If this does not work buyers worried about completing on or after 1 April 2021 could take the keys or pay 90% of the price before 1 April 2021 which would then give them the benefit. For many this will probably be unrealistic, but it might work for some.”
He added:
“For buyers of new-build flats, it may be possible to “lock in” the holiday by paying the first instalment of ground rent before 1 April 2021.
“The Act that introduced the stamp duty holiday already extends the holiday to buyers that ‘substantially perform’ the sale contract before 1 April 2021. For some [for example, off-plan flat-buyers], this might be worth considering.
“Retaining the [up to] £15,000 saving might outweigh the negative cash flow cost of paying the tax before completion.”
