It’s been reinforced that the Chancellor Rishi Sunac is going to make an announcement in his Budget on 3 March, to extend the Stamp Duty Relief until the end of June. This is reassuring news for those who were already in the process of buying a property and feared that the sudden and untimely end to the present Stamp Duty Holiday meant that their transactions would not be completed on time.
What is stamp Duty:
Stamp Duty (Stamp Duty Land Tax) (SDLT) is a tax passed onto the Government by the buyer of a property. These levy payments vary, subject to the price of the property, and dependent on whether or not you are a single or multiple purchaser.
What is stamp Duty Relief:
The Stamp Duty Relief, (or Stamp Duty Holiday), was introduced in 2017 to assist first time buyers wishing to get onto the property ladder. With the threshold being £300,000, this relief saw an approximate saving of about £10,000 on the purchase of a home, and generated a huge increase in house sales, leading to an exceptionally positive impact on the housing market for buyers, sellers, agents, and mortgage lenders.
However, with the emergence of the pandemic last year, property purchases rapidly stagnated, and brought about the biggest slump in the housing market since the property crash in 2007.
Because of the continuing adverse effects COVID was having on the property market, in July 2020, the Government increased the threshold for Stamp Duty to £500,000 giving a much-needed injection into the housing market, which in turn saw a welcomed surge in property investment. The Stamp Duty Holiday however was due to finish on the 31st of March this year, meaning that many people were either unable to complete on their property deals before the deadline, or had left it too late to start the procedure. But with growing pressure from all sides, Government were asked to extend the relief period for another three months, to prevent transactions currently going through the process from falling through. For many buyers, through no fault of their own, possibly being forced to pull out of the purchase, the Chancellor has currently agreed to a further limited extension until the end of June, meaning that many people will, during this period, be able to complete on time, whilst others may still have a chance to grab this temporary opportunity to purchase their properties within the new relief timescale. This can only have a positive effect on the housing economy as we recover from the slow release of the COVID lockdown restrictions.
Who Will Benefit:
- It’s anticipated that around 300,000 property acquisitions will benefit from the relief extension.
- First time buyers already going through the purchase operations, will now have more time to complete their transactions.
- Those who are able to acquire a property without the worry or setbacks within a linked housing chain (dependent on previous and successive purchases) may well be able to purchase their property within an estimated six to ten weeks, enabling them to get a quick buy before the projected holiday deadline.