Buyers are rushing to beat the 6th of April rise in stamp duty to 5% for properties over £1 million.
A buyer purchasing a house for over £500,000 will have to pay 4% stamp duty, so for example a home costing £1.1m will cost £44,000 in stamp duty.
From the 6th of April homes over £1m will attract a 5% duty, so that £1.1 million property requires £55,000 duty.
This is expected to impact more expensive homes even harder – for example buying a £2.5m house will currently involve buyers spending £100,000 on stamp duty, and this will go up to £125,000 as from April.
For clients who are concerned about the rise in stamp duty the best advice would be to have a mortgage agreed in principle. If your purchase is subject to the sale of a property, then ensure your buyer is in a full cash position. These questions are necessary in the current market. Then make sure you use a solicitor who has a reputation for pushing transactions through quickly.
Another way to meet the deadline would be to complete before your anticipated move, so for example if the sellers don’t want to move out until the end of April you could complete before the 6th and you could sign a legal agreement ‘license to occupy’ allowing the vendor to occupy post-completion.
For a seller, the potential problem is if a buyer does not emerge before April. If you are a seller and you do miss the stamp duty deadline then it might be advisable to see whether you can drop your property price just below the thresholds, then ask for a ‘cash payment’ for fixtures and fittings, as long as these are not enormous figures, then HMR might be concerned about tax evasion.
As with all advice, we realise that all of our clients circumstances are individual, so if you would like specific advice on your concerns relating to the stamp duty rise then contact one of our 26 branches in your area for more information:
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