Stamp Duty Holiday Completion Date Clauses?

ahdinko

This might be quite a recent thing given the stamp duty holiday coming in a month ago but here goes:
I'm looking at buying a new build that is due to be completed February 2021. The stamp duty holiday pushed me over the line to buy this, so I'd like to get a clause included with the solicitors to help focus minds and ensure that their completion falls within the stamp duty holiday window, incase they delay completion because they got in a fight with their subcontractors/build it wrong and have to rebuild some of it/etc. Ideally with the clause that if they fail to complete before 31st March, it would result them paying the stamp duty. Obviously stuff completely out of the builder's control like a national lockdown ordering all construction sites to cease, would not be their fault and so I wouldn't be expecting them to pay, but its more around delays that are within their own control.
Has anyone managed to put in any clauses like this or shorter term longstop dates recently?

AdrianC

ahdinko said:

This might be quite a recent thing given the stamp duty holiday coming in a month ago but here goes:
I'm looking at buying a new build that is due to be completed February 2021. The stamp duty holiday pushed me over the line to buy this, so I'd like to get a clause included with the solicitors to help focus minds and ensure that their completion falls within the stamp duty holiday window, incase they delay completion because they got in a fight with their subcontractors/build it wrong and have to rebuild some of it/etc. Ideally with the clause that if they fail to complete before 31st March, it would result them paying the stamp duty. Obviously stuff completely out of the builder's control like a national lockdown ordering all construction sites to cease, would not be their fault and so I wouldn't be expecting them to pay, but its more around delays that are within their own control.
Has anyone managed to put in any clauses like this or shorter term longstop dates recently?

Of course you can ask.

If they say no, will you walk away?

steve866

Maybe a clause that says the building will pay stamp duty due up to £10k? If it’s finished before March they wouldn’t have to it a thing.

ahdinko

Thats exactly what I'd like Steve, anything before March 31st has no fee, anything after would see them paying the stamp duty (as long as there wasn't a big lockdown stopping them etc). In an ideal world, they will finish on time, i will get the stamp duty holiday and all will be well, just want to cover myself incase!

Just seeing if anyone else has managed to get that in their contracts!

ash4040

Interested to see what happens

yvoxwl

We wish to purchase a not yet built property on a small estate. For phase 2 The developer wants to sell each plot of land for £350k so he will have money to build the houses. Not sure what happened on phase 1.  Our plot of  land would be purchased in the next month or so but the house would not be finished until after the stamp duty March deadline. The cost of the house would be £500k. Does anyone know how much stamp duty would have to be paid. Is it just on the house (post new stamp duty rules) or is it on the total £850k (part pre stamp duty rules and part post new stamp duty rules). 

SDLT_Geek

yvoxwl said:

We wish to purchase a not yet built property on a small estate. For phase 2 The developer wants to sell each plot of land for £350k so he will have money to build the houses. Not sure what happened on phase 1.  Our plot of  land would be purchased in the next month or so but the house would not be finished until after the stamp duty March deadline. The cost of the house would be £500k. Does anyone know how much stamp duty would have to be paid. Is it just on the house (post new stamp duty rules) or is it on the total £850k (part pre stamp duty rules and part post new stamp duty rules). 

This sounds like it might be a “Prudential” structure.  That means you buy a plot of land.  You complete the purchase before the builder does the building work under a separate contract.

If this is what you doing then SDLT is due on the £350,000 when you complete the purchase of the plot, at the rates of SDLT then in force.

yvoxwl

So does that mean the 350k would be SDLT free as it’s under 500k and before 31st March 2021. 

SDLT_Geek

Perhaps for VAT reasons the builder will want to get to "golden brick" before selling you the plot.  If so it counts as a "dwelling" for SDLT.  You need to work out whether the extra 3% SDLT applies.  It might, if you own another property.  If the 3% extra SDLT does not apply then I would not expect any SDLT to apply if it completes by 31 March 2021.  https://www.blakemorgan.co.uk/stamp-duty-land-tax-holiday/