The government has confirmed that the current stamp duty holiday will be extended until the end of June in England, Northern Ireland, and Wales.
This will come as a relief to those hopeful buyers who were trying to buy or sell in time to meet the previous deadline of 31st March. The stamp duty holiday means that many people will either receive a discounted stamp duty with a potential of not having to pay any of it.
What is stamp duty?
Stamp duty is the name given to the tax you have to pay when buying a property or land. Since 2014, the home nations have had a stamp duty rate system, it is charged as a percentage of the purchase price. Last July, the threshold had been temporarily increased to £500,000 which enabled buyers to increase their savings substantially. In order to smooth the transition back to the normal rate, the nil band will be £250,000, which is double the standard level, this will last until the end of September.
The government introduced the stamp duty holiday in correspondence to the first COVID-19 lockdown last year in order to try and help boost the housing market. The extension means that buyers now have the opportunity to purchase a home without having to pay any stamp duty until the 30th of June.
Stamp duty holiday broken down
The stamp duty holiday through England and Northern Ireland was originally planned to draw to a close March 2021, but has since been extended.
Until June 30th there will be no stamp duty payment expected on the first £500,000 of any property. This is then set to decrease down to £250,000 between July 1st and September 30th. However, from October 1st the stamp duty holiday would have been closed meaning that normal rates will apply.
It is required that property purchases are completed either on or before September 30th to benefit from the stamp duty holiday. If the property purchase is made after this then the deadline would have been missed and the normal rate of stamp duty for the property is expected to be paid.
How will the extension affect the market?
One of the obvious changes to the market from the introduction of the stamp duty holiday is the greater demand, which is predicted to continue in accordance to the extension. HM Revenue & Customs figures present that 129,400 transactions went through in the Uk in December alone, this is a significant increase of almost half when compared to the figures in the previous years.
The real estate group Zoopla have claimed that at least 740,000 of their buyers will, if not already benefited from the stamp duty holiday by the set end date. They continued to state that 600,000 buyers who agreed to purchase from May 2020 onwards won’t have to pay any stamp duty, this results in an average saving of £4,660 which is hugely beneficial to buyers and in particular first time buyers.
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