At the start of February the UK government held a debate about the stamp duty holiday in the House of Commons after a petition on the subject garnered over 130,000 signatures (petitions only need 100,000 before they must be considered for debate in parliament). The subject at hand was whether or not the stamp duty holiday should be extended for an additional six months (the current deadline is 31 March), offering a tax cut for buyers and stimulating the housing market during an uncertain time.
Signatories to the petition included trade bodies the Association of Retirement Housing Managers, the Retirement Housing Group UK, the Chartered Institute of Housing and the Civil Servants Pensioners’ Alliance campaign group. While there has still been no formal announcement of an extension, there is a strong argument to be made for how it will benefit the market.
What exactly is Stamp Duty Land Tax?
Stamp Duty Land Tax is a property tax paid by someone who purchases property or land in England or Northern Ireland (it’s slightly different from Scotland where it is called Land and Buildings Transaction Tax, while in Wales it’s known as Land Transaction Tax). This tax is only paid when the sale is complete and is based on the sum paid for the property or land. Under the stamp duty holiday, the tax threshold was increased to properties of £500,000 and above.
Why should the holiday be extended?
When Chancellor Rishi Sunak announced the holiday last July it marked the beginning of a pick-me-up for the UK housing market, saving buyers as much as £15,000 if they acted before the 31 March deadline. By temporarily scrapping the tax on UK property purchases with a value of less than £500,000, the Government ushered in an unexpected boom in sales toward the end of 2020.
Now, as the UK continues to feel the effects of the pandemic and multiple lockdowns, there is a strong case for giving the economy a further boost with a stamp duty holiday extension, or making it a permanent fixture all together.
According to research from property website Rightmove, an estimated 100,000 buyers are currently in the process of buying and will fall short of the deadline, ultimately facing an unexpected tax bill. Furthermore, an anticipated spike in unemployment with the furlough scheme set to end in April could slow house sales substantially this year.
If the Stamp Duty Holiday is successfully extended, 2021 might mark the perfect time to proceed with UK property and investment plans with the assistance of Tailor My Property and our extensive network of property and finance experts.
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