Temporary stamp duty relief: Should you move now?
As 2020 draws to a close, should you be taking advantage of the latest stamp duty tax cuts to potentially save as much as £15,000 off your next property purchase?
It’s been a year of record spending for the government. First it was the business grants, then it was the furlough scheme, after that it was the economy-boosting Eat Out to Help Out initiative, and more recently, in an announcement none of us were predicting, it was waiving the stamp duty tax on property purchases up to £500,000.
That’s right – in a bid to get the property market buoyant again, the powers that be will not tax you if the price of your new home falls within this band.
The stamp duty cuts have encouraged many people who were previously on the fence about moving home to finally take the plunge and put their house on the market, in the hope that they will save a significant amount of cash in fees.
Should you become one of them?
Well, in my mind, the question must really be: could you?
You may be desperate to get out of your current situation after spending lockdown in a property that just doesn’t suit you anymore. You might be lured in by the prospect of being able to put the money you’d normally spend on stamp duty into a fixer upper, or a slightly better property that might have otherwise been outside of your price range. I get the attraction. I really do.
But regardless of the dreams you have and the money you want to hold onto, is it practical for you to move now? Especially amidst the chaos of the ongoing coronavirus pandemic?
Could you spend time and energy improving your existing home, instead of tearing your hair out trying to up sticks to another?
My advice would be to really think carefully about how relocating would impact you and your family, and whether the potential financial gains outweigh the risk of the stress, uncertainty and disruption moving home can bring into the mix. If they do, great – enjoy working towards your next chapter! But if they don’t, maybe it’s best to hold back on the grand gestures and find a more creative way of improving your living space.
You also need to consider what’s going to happen when the relief ends, and people have to start paying usual rates again. Analysts are not expecting the government to extend the cut any further – so if there’s a delay in the conveyancing process, and you don’t manage to exchange by 31st March 2021, you could very well be liable to pay the fees after all. As I write this, the deadline is just over 6 months away. It seems far into the future, but those of us who have navigated tricky sales or purchases know that closing a deal and getting the keys can easily take half a year or more. Imagine proceeding under the existing rules, then having to find thousands of pounds at the very last hurdle!
If you do decide that now is the best time to sell up and move on, you need to be wary of the level of competition you’re facing at the moment. You need to think about how you’re going to attract the best possible buyer (and command the best possible price). What is it about a listing that turns your head? It’s the photos, of course. The instant desirability of a property is often down to the way its interiors have been styled and staged. You need to be presenting your home to viewers in a way that not only captures their attention, but also enables them to visualise themselves living there. This is where I can help!