With the chancellor’s Stamp Duty holiday due to end on 31 March 2021, time is running out for those hoping to buy a property without a hefty tax payment.
Once the break period ends, Stamp Duty will be payable once again on properties priced at over £125,000.
The Stamp Duty holiday
Implemented in the summer of 2020 to stimulate the housing market following the first lockdown, the Stamp Duty holiday applies to homes in England and Northern Ireland and offers substantial savings of up to £15,000.
Those buying a property worth up to £500,000 will not be charged any tax provided they complete by the end of March.
The housing market duly boomed in August, with estate agents reporting the number of accepted offers up around 150 per cent on the same period for the previous year and the number of buyers registering up around 100 per cent.
Prices also increased in 2020, with the cost of an average house up by over £13,000.
Calls for the Stamp Duty holiday to be extended
With conveyancers, search providers and estate agents under pressure of both an increased workload and difficulties in working remotely and managing staff absences, the house buying system has been struggling to keep up with demand.
Mortgage applications and surveys are also moving slowly, with backlogs reported.
Industry representatives including estate agents, surveyors, conveyancers and removal companies, wrote to the government asking for the holiday to be extended with individuals delivering a signed petition.
Conveyancing ordinarily takes an average of around three months. With delays widespread, buyers are worried that they will not complete by the deadline.
However, addressing the petition the government has said that there is no intention to extend the holiday.
The Treasury said: “As the relief was to provide an immediate stimulus to the property market, the government does not plan to extend this relief.
“The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market.”
There are concerns that the cliff-edge ending to the scheme will cause a sudden dip in the property market at a time when the economy is already at a low ebb. The industry is still hopeful that an extension may be offered, particularly in light of the third lockdown.
What happens if I cannot complete before 1 April 2021?
As the situation stands, if a purchase is not completed by the end of March 2021 then the buyer will not be able to take advantage of the holiday and Stamp Duty will be payable in full.
Any transaction already under way will need to be pressed through as quickly as possible to try and avoid missing the deadline.
If you are thinking of buying a property and you would like to speak to one of our expert lawyers, ring us on 0333 305 5189 or email us at enquiries@lpropertylawyers.co.uk
