Stamp duty holiday could be extended

The stamp duty holiday, due to end on March 31 this year, could be extended to the end of June, 2021. Chancellor Rishi Sunak is said to be planning the announcement in his budget on March 3. The holiday, which stretched the tax threshold to £500,000, has equalled substantial savings of £1,500 for those buying a £200,000 home and up to £15,000 for those purchasing a £500,000 property.

The Chancellor has been under pressure to extend the deadline due to delays pushing home sales through an already overwhelmed conveyancing system. While the Chancellor was trying to protect the housing market, which he sees as one of the most vital areas of the economy, his largesse has helped push an already frantic sector to breaking point as buyers rushed to beat the clock.

According to Rightmove, 100,000 sales will miss the stamp duty holiday deadline, largely due to the backlog in conveyancing. Estate agents fear this may lead to buyers either pulling out of a deal or demanding last-minute price reductions to reflect the additional tax burden. While there have been calls for an extension to the stamp duty holiday, some fear this may lead to another cliff edge.

If the Chancellor does extend the stamp duty holiday to the end of June this year, Rightmove estimates an additional 300,000 property transactions in England could benefit from the tax saving, based on previous HMRC data. If an additional 300,000 transactions made it through, buyers could save £1.75 billion in total.

Based on the current sales that have been agreed in England, 80 per cent would pay no stamp duty due to this holiday. There are an estimated 628,000 sales in total still currently in the legal process across Britain, including those that were agreed last year and those that have been agreed so far this year.