Expert Issues Warning As March Deadline Looms
First-time buyers must act quickly if they want to save up to £2,500 on the purchase of their property by completing before the March 25th deadline for Stamp Duty relief, a legal specialist at Irwin Mitchell has warned.
Designed to encourage more people to enter the market, the government has confirmed that tax relief for first-time buyers on any property worth between £125,000 and £250,000 will not be extended beyond the date.
This means those looking to purchase property have just months to complete deals if they want to avoid paying the tax – which currently stands at a rate of 1% of a home’s value.
Irwin Mitchell’s Conveyancing team, which guides both first-time and other property buyers through the process of buying and selling a home, has advised that any people currently house-hunting should move quickly if they want to take advantage of the incentive.
Looking back on the impact of the relief, Lisa Gibbs, head of the specialist team, said: “The government recently suggested that sadly the Stamp Duty holiday has not had the impact they had hoped for.
“Our experience supports this view that the relief has not stimulated increased activity in the market, with many first-time buyers generally continuing to struggle to save for the all-important deposit that they need to get on the property ladder.
“However, it must be said that the Stamp Duty holiday has offered major support to many of the 200,000 first-time buyers who were able to save for a deposit and buy properties across 2011.”
Lisa added that a rise in enquiries is expected as the final deadline for Stamp Duty relief edges ever closer.
She said: “New Year is a time when many people reassess their living arrangements and think about the future. This is particularly common when it comes to those renting accommodation, as they often consider their savings and think this is the year they can finally step onto the property ladder.
“However, now is the time for those who are still thinking about taking the plunge to act, if they want to ensure their deal to buy is completed before the upcoming March deadline.”
The so-called holiday was introduced in March 2010 and the criteria for eligibility is:
- That the individual or individuals jointly purchase a major interest in land which is wholly residential
- It is worth is more than £125,000 but not more than £250,000
- That they intend to occupy the property as his/her or their only or main residence
- That they have not previously purchased such an interest before anywhere in the world
- The effective date of transaction is on or after March 25th 2010 and before March 25th 2012.
Lisa said that the benefits of meeting the upcoming deadline simply cannot be underestimated, adding that there is currently no sign that the government will offer further stamp duty incentives which offer benefits to the same extent.
She said: “Following the Stamp Duty holiday, the government is set to launch this Spring its New Build Indemnity Scheme initiative to help home-buyers buy a property with just a five per cent deposit. This may be attractive to those struggling to save for a deposit, although it will only apply to new-build properties.
“First-time buyers who buy a property worth £160,000 at present avoid having to pay stamp duty of £1,600 – money which can prove invaluable when buying all of the goods and items needed to get your first home in top condition from the off.
“It is a big decision buying a home, but making the move before March 25th could offer a significant financial saving.
“We would also urge anyone seeking more information on how they can benefit from it to seek specialist advice from an experienced conveyancing solicitor who will help ensure that your purchase completes by the March 25th deadline.