Next week will see the chancellor, Rishi Sunak announce the budget and there have been many rumours as to whether there will be a stamp duty holiday extension.
If Sunak decides to extend the stamp duty holiday then approximately 300,000 properties could benefit.
The stamp duty holiday, which is due to end on the 31st March 2021, cuts the bill entirely on properties costing between £125,000 and £500,000 and reduces it on homes costing more than that.
The rumours of the stamp duty holiday extension came after Boris Johnson announced the plan for exiting the lockdown earlier this week. It is understood that the extension of the stamp duty holiday will be for three months in line with other measures to support the economy.
However, there are rumours that it might not apply to all purchases and may only apply to those who are already in the process of buying a new home. Something we know the mortgage industry has been in favour of because any home purchase where the mortgage approval has been granted by the end of March will have an additional three months to complete and still benefit from the rate reduction. The tapering off of the scheme would also ensure lenders and conveyancers are able to manage operational pressures in a COVID-secure way.
Rightmove has reported that 100,000 buyers would have to pay the tax the stamp duty holiday extension didn’t happen, which could add up to £15,000 to their costs. We have seen an increase in mortgage enquiries since the start of the stamp duty holiday scheme was implemented and official figures have shown house prices climbed by 8.5% in 2020.
We believe, by extending the stamp duty holiday, people will get their deals over the line and this will provide a welcome boost for the mortgage market.
If you are in the midst of selling your house or purchasing a new house and have a question, please get in touch and we will endeavour to help you with your query.
*Please note: The value of tax benefits described depend on your individual circumstances. Tax rules can change.