Despite widespread calls for Rishi Sunak to extend the stamp duty holiday, the chancellor has so far ruled out extending the tax break he introduced in July to keep the housing market going through the pandemic.
The nine-month stamp duty holiday is due to end in March this year with Mr Sunak said to be determined to ignore calls to prolong it. But new build property buyers could benefit if they act now, according to a tax expert.
Sean Randall, a partner at tax and advisory firm Blick Rothenberg, explains that those acquiring new build homes may be able to legitimately “lock in” to the stamp duty benefit by paying the first instalment of ground rent before 1 April 2021.
He said: “ Efforts are being made to persuade Mr Sunak to extend the stamp duty holiday which is worth up to £15,000 per property.
“If this does not work buyers worried about completing on or after 1 April 2021 could take the keys or pay 90% of the price before 1 April 2021 which would then give them the benefit. For many this will probably be unrealistic, but it might work for some.”
He added: “For buyers of new-build flats, it may be possible to “lock in” the holiday by paying the first instalment of ground rent before 1 April 2021.
“The Act that introduced the stamp duty holiday already extends the holiday to buyers that ‘substantially perform’ the sale contract before 1 April 2021. For some [for example, off-plan flat-buyers], this might be worth considering.
“Retaining the [up to] £15,000 saving might outweigh the negative cash flow cost of paying the tax before completion.”