There has been much talk in recent days of a three-month extension to the stamp duty holiday that was introduced by the government in July.
An extension to the end of June 2021 to coincide with the easing of lockdown restrictions is rumoured to be part of the Chancellor’s budget announcement next week.
It is true that the Stamp Duty Land Tax (SDLT) holiday on property purchases under £500,000 has successfully boosted the housing marketing during the pandemic. With up to £15,000 of savings to be had many people have decided to bring forward their property purchases.
This demand during lockdown has brought with it some issues, however, particularly in relation to the increased time it is taking for local authority searches to be completed and for mortgages to be approved.
Many who are in the process of buying a property and are anxious about whether such delays will cost them thousands of pounds if they miss the stamp duty holiday deadline, will be relieved if the extension is confirmed.
However, it does simply move the cliff edge to a later date and one can’t help but wonder if keeping the SDLT threshold at £500,000 permanently would be a better way to support the housing market and take the pressure off buyers and sellers.
Some are pushing for a gradual phased return of stamp duty to avoid the time pressures and potential disappointment created by a sudden reintroduction. This might sound like a simple solution on the surface of it, but it has the potential to cause major confusion and be a nightmare for everyone involved in the conveyancing process.
Certainly, if the extension to the stamp duty holiday is confirmed, buyers wishing to take advantage of the savings will need to move fast to ensure they benefit from the SDLT reprieve before normal stamp duty service is resumed.