Stamp duty holiday extension: how to make the most of it?
Chancellor Rishi Sunak has announced the stamp duty holiday will be extended for a further three months until the end of June. Whether you’re a buyer or a seller, we have the information you’re looking for.
The extension of the holiday means nine out of 10 people buying a property will not have to pay stamp duty, saving them an average of £4,500 each and a maximum of £15,000 for those purchasing a home costing £500,000.
Why has the stamp duty holiday been extended?
The Chancellor announced the stamp duty holiday in July 2020 to help kickstart the housing market in England and Northern Ireland.
The tax break triggered a mini home-buying boom. The spike in housing transactions led to a congested sales pipeline and the home buying process taking longer than the average time.
It is estimated that around 70,000 people who agreed sales in 2020 were in danger of missing the 31 March deadline. A petition calling for the stamp duty holiday to be extended received more than 100,000 signatures, triggering a debate to be held in Parliament in February.
What happens when the stamp duty holiday ends?
Once the stamp duty holiday ends on 30 June, there will be an interim period until 30 September when the tax-free threshold will fall to £250,000. The move means that nearly half of housing sales in England will be free of stamp duty. Last year, some 46% of all home sales were for properties of up to £250,000.
When do you pay stamp duty?
You must pay stamp duty within 14 days of completing your property purchase. Your solicitor or conveyancer will usually file this return and transfer the money on your behalf.
Government support is also available
During the second lockdown, the government extended its offer of mortgage payment holidays. Borrowers who need help paying their mortgages can still request a holiday of up to six months until 31 March 2021.
Meanwhile, the government’s Help to Buy scheme offers an equity loan to buyers with a 5% deposit. The initiative will close on 31 March and be replaced with a new version, which will only be available to first-time buyers.