The government is to answer a call made in an online petition for stamp duty to apply when contracts are exchanged, rather than at the point of completion.
Well over 12,600 people have a signed a formal petition on the government website seeking the tax - and therefore, in the current circumstances, the stamp duty holiday as well - to apply when contracts are exchanged.
Surveyor Christopher Holland, who initiated the petition in the early spring, says some buyers are being trapped because of rapidly-rising prices, forcing them to miss out on the tax break when their purchases suddenly break the £500,000 holiday threshold.
The issue is now coming to a head because the stamp duty holiday’s main phase ends on June 30, only four weeks from now.
Because over 10,000 signatures have been secured by the petition, the government is obliged to give a response to the call; so far, almost a week after the key number of signatures was reached, the government has yet to give a written statement.
The petition says: “People are finding themselves becoming trapped in a scenario whereby house prices are much higher, and at the same time they will now miss out on the stamp duty holiday. People are being financially punished from both sides, this from a policy that was designed to do the exact opposite.
“Exchanging contracts is exactly what it says. A contract, a legally binding agreement, to purchase a house often with an immediate 10 per cent deposit being paid. So why shouldn’t you benefit from the stamp duty holiday being triggered at that moment of exchanging contracts, rather than at the point of completion?
“This will allow in particularly new build buyers, with continuous building delays due to Covid-19, to benefit from this policy.”
After June 30 there will still be a limited holiday when the starting threshold of stamp duty will be £250,000 until the end of September.
You can see the petition here.
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Would it really be that easy? “A contract, a legally binding agreement, to purchase a house often with an immediate 10 per cent deposit being paid.” Surely some buyers and sellers, close to exchange, would be urging their conveyancer to exchange subject to all manner of things:
Subject to a clear search being returned
Subject to the buyer receiving their mortgage offer
Subject to the production of a missing planning permission
Possibly even subject to the rest of the chain exchanging!
It could be stipulated that exchange can’t be conditional (or subject to anything). However, that might be difficult as all exchanges are already (and to some degree) conditional. I. e. conditional upon:
Vacant possession being obtained
Completion taking place within a certain timescale
No error or omission having been made by the seller in the contract or the negotiations
The devil would be in the detail, and does the Government really have the time or inclination to look into the detail at the moment?
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