Property website Rightmove has cautioned home buyers of an unexpected tax bill of up to £15,000 each if the stamp duty holiday ends as planned on March 31. The property website said some sellers who had put their property on the market during the last few weeks were hoping to tempt buyers with a competitive price in an attempt to squeeze in a sale before the deadline arrives.
Rightmove said its latest analysis showed that it was taking 126 days from the time an offer was accepted until legal completion. The website estimates that 613,000 property sales agreed in 2020 are “stuck in the processing logjam”. Out of these, it estimates that about 100,000 buyers will miss out on their stamp duty saving, and find themselves to have to pay thousands of pounds worth of tax bill in case the cut-off date remains in place.
Rightmove's director of property data, Tim Bannister, said the challenge of processing so many house sales in less than three months “is made even tougher by the new lockdown restrictions, Covid-19 sickness and home schooling further reducing capacity in conveyancing, legal searches and mortgage lending”.
The report is expected to renew calls for the government to extend the stamp duty holiday which allows buyers of homes of a value up to £500,000 in England, and Northern Ireland to pay no stamp duty or a reduced rate. Reports reveal Chancellor Rishi Sunak has been urged to take action as he prepares to present the budget on March 3. A Treasury spokesperson said, “The temporary stamp duty cut is helping to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity. Its time-limited nature is what has encouraged people to take advantage of the scheme.”
Just last week, home moving website Reallymoving said that if the March 31 deadline remained in place, sellers should prepare for an increase in “gazundering” where buyers reduce their offer just before exchange.
