Petition: Stamp duty holiday to be triggered upon exchange of contracts

Stampdutyhol

Hello, 

So there is a fresh stamp duty petition to hit .Gov. 

Petition:

Stamp duty holiday to be triggered upon exchange of contracts

"People are finding themselves becoming trapped in a scenario whereby house prices are much higher, and at the same time they will now miss out on the stamp duty holiday. People are being financially punished from both sides, this from a policy that was designed to do the exact opposite.

Exchanging contracts is exactly what it says. A contract, a legally binding agreement, to purchase a house often with an immediate 10% deposit being paid. So why shouldn’t you benefit from the stamp duty holiday being triggered at that moment of exchanging contracts, rather than at the point of completion? This will allow in particularly new build buyers, with continuous building delays due to COVID-19, to benefit from this policy."

Do you agree? 

davidmcn

Stampdutyhol said:

So why shouldn’t you benefit from the stamp duty holiday being triggered at that moment of exchanging contracts, rather than at the point of completion? 

Because that's not how stamp duty works?

Would you also be campaigning for the converse i.e. you can't use any beneficial changes to stamp duty which apply on your completion date but didn't exist on your exchange date?

Thrugelmir

No. The subsidy has run it's course. Include a long stop in the contract to revise the price accordingly, 

davilown

Omg get a grip. You’ve had plenty of time to take advantage of a really good tax break. 

If you’re not happy with the timings, don’t buy or pay your solicitor extra to complete on time.
why on earth do people think a petition is going to change the fact that they’ve taken too long to choose a house or that their seller has realised they’ve offered too much so need to reduce and delay the sale.

Lavendyr

davidmcn said:

Stampdutyhol said:

So why shouldn’t you benefit from the stamp duty holiday being triggered at that moment of exchanging contracts, rather than at the point of completion? 

Because that's not how stamp duty works?

Would you also be campaigning for the converse i.e. you can't use any beneficial changes to stamp duty which apply on your completion date but didn't exist on your exchange date?

But this just doesn't make sense. The point is that you agree a price with your vendor based on certain expectations. For those in the process of buying a house, both the asking price and the offer are likely to have built the stamp duty holiday into the price. It's not a saving - it's a way of preserving the housing market and house prices. Those who have agreed a price pre stamp duty holiday but not exchanged will have the ability to adjust accordingly once the stamp duty holiday ends. In contrast those who have exchanged but not completed could be stuck with an extra bill. So the reasonable position is surely to say that those who have exchanged on 30 June should be able to complete on the basis of the stamp duty holiday. 

What's more, the timeframe is really not just in the buyer/vendor hands. Those who say "get a grip" may not realise how busy the housing market has been in the last six months. Even in a chain free purchase, it can take months from offer to completion because estate agents and solicitors are utterly rammed. My partner and I offered on a property in early November 2020 and only completed in mid-March 2021. This was an utterly uncomplicated transaction - we were chain free, our vendors were too, we had our mortgage in place a week after offer. The delays were solely down to overburdened solicitors, surveyors and the local authorities in responding to requests for searches.

Accordingly it seems entirely reasonable to offer the stamp duty holiday to anyone who has exchanged by 30 June. The alternative is that a load of people will pull out of purchases because they won't complete in time. Not sure that's the point of the government policy. *shrug*

MaryNB

Lavendyr said:

davidmcn said:

Stampdutyhol said:

So why shouldn’t you benefit from the stamp duty holiday being triggered at that moment of exchanging contracts, rather than at the point of completion? 

Because that's not how stamp duty works?

Would you also be campaigning for the converse i.e. you can't use any beneficial changes to stamp duty which apply on your completion date but didn't exist on your exchange date?

But this just doesn't make sense. The point is that you agree a price with your vendor based on certain expectations. For those in the process of buying a house, both the asking price and the offer are likely to have built the stamp duty holiday into the price. It's not a saving - it's a way of preserving the housing market and house prices. Those who have agreed a price pre stamp duty holiday but not exchanged will have the ability to adjust accordingly once the stamp duty holiday ends. In contrast those who have exchanged but not completed could be stuck with an extra bill. So the reasonable position is surely to say that those who have exchanged on 30 June should be able to complete on the basis of the stamp duty holiday. 

What's more, the timeframe is really not just in the buyer/vendor hands. Those who say "get a grip" may not realise how busy the housing market has been in the last six months. Even in a chain free purchase, it can take months from offer to completion because estate agents and solicitors are utterly rammed. My partner and I offered on a property in early November 2020 and only completed in mid-March 2021. This was an utterly uncomplicated transaction - we were chain free, our vendors were too, we had our mortgage in place a week after offer. The delays were solely down to overburdened solicitors, surveyors and the local authorities in responding to requests for searches.

Accordingly it seems entirely reasonable to offer the stamp duty holiday to anyone who has exchanged by 30 June. The alternative is that a load of people will pull out of purchases because they won't complete in time. Not sure that's the point of the government policy. *shrug*

Moving it from completion to exchange only moves the date by a few weeks at most. It's already been extended by several months. Anybody who's initial purchase was due to complete around March should have seen it as a bonus not a guarantee, as should anyone completing between March & June. Anybody offering on a house now who won't be able to afford it without the stamp duty holiday is just being unfair to their buyer. I realise there are a many people with purchases that have dragged out much longer than expected but they can't just keep extending it, it'll never be fair to everyone. 

Regarding those who exchange who could be stuck with an extra bill - you don't exchange without a completion date agreed so you would know at exchange whether or not stamp duty is due. 

Lavendyr

Not quite accurate. Most will build the stamp duty expense into their purchase price, as it forms a substantial cost. 

Were you in a position of buying a house within the stamp duty holiday? I was. Had we been unable to complete within that window we would have dropped our offer accordingly. It’s not a bonus and there is no saving; it’s a way of propping up house prices and keeping the market moving. Our vendors recognised this and acted accordingly by moving into rented accommodation to ensure the sale went through (this was before the extension). 

To be clear, I am absolutely not suggesting keeping on extending it. Just seems fair to say that if you have contracted to pay £X for a house before the holiday deadline - i.e. if you have exchanged - then the government will contract with you that you will benefit from the stamp duty holiday. Simple as that.I don’t see why that is so upsetting.

hazyjo

If an exchange date is before the end of the stamp duty holiday, they could just complete on the same day. If they miss the reprieve and have exchanged, they only have themselves to blame.

Your argument makes little sense. What's so special about those who have exchanged? What about the others who may be several months in who haven't reached exchange? You say "...a load of people will pull out of purchases because they won't complete in time." But that's surely everyone. It certainly won't be those who have exchanged, will it.

lookstraightahead

What about everyone who isn't in a position to buy until next year? Should we stretch it out for them too?

AdrianC

Lavendyr said:

What's more, the timeframe is really not just in the buyer/vendor hands. Those who say "get a grip" may not realise how busy the housing market has been in the last six months. Even in a chain free purchase, it can take months from offer to completion because estate agents and solicitors are utterly rammed. My partner and I offered on a property in early November 2020 and only completed in mid-March 2021. This was an utterly uncomplicated transaction - we were chain free, our vendors were too, we had our mortgage in place a week after offer. The delays were solely down to overburdened solicitors, surveyors and the local authorities in responding to requests for searches.

And when in that did you exchange?

Because you ain't ready to exchange until the "overburdened solicitors, surveyors and the local authorities in responding to requests for searches" have done their thing. Simultaneous exchange and completion has been more rife than before through this last year.

MaryNB

Lavendyr said:

Not quite accurate. Most will build the stamp duty expense into their purchase price, as it forms a substantial cost. 

Were you in a position of buying a house within the stamp duty holiday? I was. Had we been unable to complete within that window we would have dropped our offer accordingly. It’s not a bonus and there is no saving; it’s a way of propping up house prices and keeping the market moving. Our vendors recognised this and acted accordingly by moving into rented accommodation to ensure the sale went through (this was before the extension). 

To be clear, I am absolutely not suggesting keeping on extending it. Just seems fair to say that if you have contracted to pay £X for a house before the holiday deadline - i.e. if you have exchanged - then the government will contract with you that you will benefit from the stamp duty holiday. Simple as that.I don’t see why that is so upsetting.

I was an FTB so didn't affect me. My colleague bought and his purchase was at risk of going beyond march 31st so his offer was conditional (he'd drop the offer by X amount if the sales goes beyond the holiday). Not all sellers were on board but he finally had an offer accepted. If the sellers are aware it's fair enough. However there are a few people on this forum who have admitted they'll pull out if they can't meet the holiday (without letting the seller know when they offered) or have buyers who have threatened the same. 

Saying homeowners have less control over the timeline may be true but it wasn't unexpected. I knew back in August when I offered that there were significant delays. I couldn't get a local surveyor out for at least a month and some lenders (HSBC comes to mind) were having significant delays. I was lucky not to have delays with searches or conveyancing but they were well reported on.  Your November to March purchase doesn't seem that long to me given everything that was going on. 
I mean the government has extended it by 3 months with a taper for FTBs to October so there already has been a significant allowance for delays. 

It's not upsetting. There have just been several threads here where people have argued for a variation to the stamp duty holiday for no other reason than it benefits their personal situation. People trying to elicit sympathy or linking to petitions.
All the arguments come down to, "this change should be made because it benefits me".

If it gets moved to exchange and there's another holiday announced in the future, then loads of people will kick off because they exchanged before the holiday was announced but won't be completing until after it's introduction. They'll want to moved to completion again so they can benefit. They won't think it's fair then. Rinse and repeat.