Time running out to take advantage of Stamp Duty 'holiday'

A buyer completing on a main residence costing up to £500,000 will not, therefore, pay any SDLT. More expensive properties will only be taxed on their value above that amount.

If the property being purchased is not a 'main residence', then this also applies.

The SDLT holiday stimulated the housing market, with many buyers trying to complete their purchases before normal rates returned.

However, time is running out. A typical property purchase takes three to four months to complete. Mortgage companies and conveyancers are all very busy and there have been other factors which have slowed down the process for many. Anyone finding a property to buy now will be lucky to get the purchase progressed up to exchange of contracts and completion by March 31.

How could it be achieved?

The 'effective date' of a transaction determines when liability to SDLT arises. Generally, the effective date is when that land transaction is completed, ie when the purchase price is paid over, the buyer is handed the keys and the title is legally transferred to the buyer. But where such a contract is 'substantially performed' before it is formally completed, the contract is treated as if it were itself the transaction provided for in the contract.

What does 'substantially performed' mean?

Broadly, 'substantially performed' means:

any payment of rent is made

most of the purchase price is paid

the purchaser is entitled to possession of the subject matter of the transaction

It might be possible to substantially perform a property purchase before the deadline but legally complete the purchase afterwards and still benefit from reduced rates. Specialist advice should be sought before attempting any such measures.

David Marsden is a partner at law firm VWV, with offices in Clarendon Road,Watford. Contact 07770 413 164 or dmarsden@vwv.co.uk