Last updated on March 5th, 2021 at 01:39 pm
The stamp duty holiday, which, until today, was due to come to an end on 31 March 2021 means that stamp duty is only payable on properties valued at over £500,000 where the purchase is completed before 30 June 2021. After that, stamp duty will only be payable on properties valued at over £250,000 until the end of September 2021, when the property value at which stamp duty becomes payable will return to £125,000.
The extension will come as a relief to the estimated 70,000 – 100,000 buyers who were at risk of missing the March 2021 deadline and facing the decision whether to pay thousands of pounds in unexpected stamp duty or having to pull out of their purchase altogether. According to estate agents, Rightmove, the extension will save those buyers up to £1 billion.
Caroline Murray, partner and head of Graysons’ conveyancing department, says:
“This is excellent news for those buyers who might have been caught in the so called ‘completion trap’, whereby completion of their purchase has been delayed because of COVID-19 lockdowns and staff shortages as well as the extra demand caused by the stamp duty holiday itself. These people should now be able to complete their purchase and save money by not having to pay stamp duty. The extension is likely to lead to a further surge in the housing market with more buyers hoping to take advantage of the stamp duty holiday, but it is important to note that the holiday is unlikely to be extended again and new buyers could find themselves in the same situation at the end of June or September as those who are in the process of purchasing now, so, in order to save the highest amount of money, it is important to start the process as soon as possible. Whilst we would normally anticipate that it may take between 8-12 weeks for a sale/purchase to complete from receipt of initial documentation, COVID-19 related factors and current pressures on professionals, mortgage lenders, local authorities and search providers means transactions are still taking longer to complete.”
When the stamp duty holiday comes to an end on 30 Sept 2021, stamp duty will once again become payable on (main residence) properties over £125,000 at between 2% and 12%, depending on the value. First-time buyers will continue to benefit from increased stamp duty thresholds whereby it only becomes payable on property over £300,000, then 5% on anything above that, up to £500,000. Stamp duty is then payable by first-time buyers at the standard rate on the whole value of the property.