Rishi Sunak Due To Give Economic Update On Wednesday
Reports that the Chancellor Rishi Sunak is to temporarily raise the Stamp Duty Land Tax (SDLT) threshold to £500,000 will provide a much needed boost to the housing market say conveyancers who say there are still people looking to move home.
The media are reporting that the threshold at which people start paying the tax when buying property could be raised from £125,000 to £500,000 in the autumn budget – with the new limit put in place temporarily for six months.
Expert Opinion"The housing market has always been massively dependent on consumer confidence and certainty, and any measures of this nature can be hugely encouraging to those negotiating or considering a purchase. The new limit will bring the majority of residential property purchases into the ‘tax free’ category - and will effectively make home buying cheaper, albeit sellers will no doubt try to capitalise on the giveaway too.
"However, as always the timing and ‘bite point’ of these measures will be key – now that this has been trailed, buyers will want to ensure that they don’t lose out on the Government’s assistance, and it's therefore essential that clear guidelines are provided as soon as possible as to when these changes will apply from, and whether they will apply to deals that have already exchanged contracts. If there are delays until after the Autumn statement or the message is unclear this could have the unintended effect of stalling the market. As it is, there will no doubt be added pressure around the £500,000 price mark, and we can expect some difficult conversations as a result.
"First time buyers in particular have always struggled to find the often-considerable amounts required to pay SDLT. We have had many clients over the years that hadn’t factored in the additional cost of the tax when first setting their budget. Downsizers and those trading their way up the property ladder will also now have an added bonus in sight but all of them will want to know for sure whether they will be able to share the benefit of these new measures. Traditionally, mortgage lenders have not lent based on the tax-inclusive amount which buyers have been expected to find themselves, along with the deposit. Jeremy Raj - Partner
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