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Is the stamp duty hike a bonus for squatters?

A recent newspaper article raised the suggestion that the 7% rate of stamp duty on property sales over £2m could prove an unexpected bonus for squatters! 

A recent blog by Ian Cowie, head of personal finance of the Telegraph Media Group, raised the possibility that buyers of high-value homes might choose not to pay the stamp duty. However, not paying the stamp duty would mean they would be unable to register the transfer of title at the land registry, and so find it difficult to claim legal ownership if they wanted to, for example, take legal action to evict squatters.  

Would squatters be aware of this when they entered a property – I wonder. I would not have thought that the average squatter usually carries out a land registry title search beforehand. But it does seem that they can afford excellent legal advice when attempts are made to eject them, so perhaps they do now get Conveyancing Solicitors to investigate title first.

Of course those of us who live in the real world don’t really have the choice of not paying stamp duty. The land registry won’t register a title transfer unless they have evidence that any stamp duty due has been paid. Anyone needing a mortgage won’t have much option – lenders’ Conveyancing Solicitors will have to make sure that the new mortgage is registered and that can’t be done unless the transfer to the buyer is also registered.  

Even if you are lucky enough not to need a mortgage, most people buying a home will want to be registered as the owner. Apart from possible difficulties with squatters, it would be difficult to sell a house which was registered in someone else’s name. You might have a transfer deed from the registered owner, but a buyer’s Solicitor is going to be suspicious as to why that hasn’t been properly registered before.

So in conclusion –  not registering would be a high risk way of avoiding stamp duty on a property purchase.


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