This year I am sure most people will be a little perplexed as to what 2021 will bring. The majority of us will certainly be wishing for a Covid-19 free year, as I am sure all of us have not come away unscathed by the pandemic that has played havoc with 2020.
As I write this article I am preparing for Christmas. Normally, at this time of year, I would be recovering from a variety of sore limbs from my rather ambitious dance moves after the Christmas party, my body declaring an intolerance to mince pies after eating a van’s worth of them, and I would be running around like a frantic chicken trying to get the house organised before the Keohane clan arrives!
This year, however, is very different. There is a strong possibility that none of the Keohane clan will make it to my house this year as my nephew has caught Covid-19 and, most likely, so have my parents. My normal embrace for all Christmas songs and glittery items of clothing throughout the month of December has certainly fallen flat, but in an attempt not to be completely gloomy this does mean that being home alone I will get control of the Roses chocolate tin!
So what will 2021 bring? Well, there is a sense of some optimism in the air with the new vaccination programme being rolled out. However, I doubt that it will be back to business as usual, and with Covid-19 and Brexit looming at the start of the year it certainly won’t be full throttle for most.
From a personal perspective the firm’s property department has been extremely busy in lockdown, particularly our residential department as the stamp duty break has created an influx of people wishing to take advantage of the saving. The pandemic has also made people reflect on their lifestyle, particularly outdoor space, and we have seen a surge of people moving from the city into more rural settings.
Why was the Stamp Duty Land Tax changed?
It became very clear that the property market was suffering because of Covid-19, particularly during the first lockdown back in March. In a bid to revive the market, Chancellor Rishi Sunak announced a Stamp Duty Land Tax (SDLT) break. Before that, only first-time buyers were eligible for non-payment of SDLT for homes worth up to £300,000.
The SDLT break allows residential property buyers, whether they are first-time buyers or not, to be exempt from paying SDLT on properties up to a value of £500,000. The exemption does not apply if the buyer will own more than one property on completion.
Under a staggered band approach, for properties over £500,000 the SDLT payable is 0% for the first £500,000 and 5% up to a value of £925,000. For example, if a house is worth £530,000, the SDLT payable is £1,500. The first £500,000 is exempt and 5% is paid on the residual £30,000. If the SDLT break was not in place the amount payable would be £16,500. There is a band increase up to 12% for properties over the value of £1,500,000.
Understandably, most buyers want to make the most of this SDLT break. If buyers want to benefit, they should already have a proceedable offer and instruct solicitors prior to Christmas. Estate agents are already warning clients that they may not make the deadline of 31 March 2021. As it currently stands, the Government has not announced any intention to extend the SDLT break.
One thing that is certain for me in the new year will be my role at work, as I will be stepping into a new role as head of the firm’s property department. With the changes ahead and business re-emerging after the pandemic, it will certainly keep me busy and out of trouble…at least for a short while! I wish you all a happy and healthy start to 2021.