It is now known that on the 3rd March, an announcement by the Chancellor Rishi Sunac will be made in his Budget, that the current Stamp Duty Relief will be extended until the end of June. This is of course excellent news for all those home buyers already in the process of purchasing a property, and fearing that the end of Stamp Duty, which was originally scheduled for 31st March, would mean that their transactions would not be completed before this date and therefore they would miss out on the savings.
What is Stamp Duty?
Stamp Duty, or “Stamp Duty Land Tax” is a tax that must be paid to the government by property buyers. The amount of tax paid is calculated according to the purchase price of the property, and also varies depending on whether or not this is the buyer’s main or only home. The threshold for liability of Stamp Duty was £125,000 pre-covid.
What is Stamp Duty Relief?
Also known as the “Stamp Duty Holiday”, this was introduced on 8th July last year as a way to stimulate a flagging housing market, and provide much-needed incentive for people to consider moving or buying their first home during this time. The threshold for Stamp Duty liability was thus increased from £125,000 to £500,000. This means that for property purchases of £500,000 or more, the maximum saving is a whopping £15,000. This really worked, as the property market has been booming ever since, with a much welcomed surge in property investment. However, as the Stamp Duty Holiday was originally due to finish at the end of March, many buyers would have been left either unable to complete on their property deals before the deadline, or had left it too late to begin with to start the procedure. But there was increasing pressure on the Government to extend the relief period for a further 3 months. For many buyers, possibly being forced to withdraw from their purchase, the Chancellor has agreed to the end of June extension. This means that buyers who are currently going through the process will be able to complete on time, and others who have not started yet will be able to seize the opportunity.
Who Will Benefit?
– It is estimated that around 300,000 property purchases will benefit from this relief extension.
– First time buyers who are already going through the purchase procedure, now have extra time in which to complete their transactions.
– Providing there is no linked housing chain, in which the property purchase is dependant upon previous and successive purchases, these buyers may well be able to complete their transaction within 6 to 10 weeks and therefore before the Stamp Duty Holiday deadline.
So, what are you waiting for…grab the opportunity while you still can!
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