The extension to the stamp duty holiday announced in the Budget today will come as a relief for homebuyers, says a solicitor at a leading legal firm.
Jonathan Carroll, who is a director at Cartmell Shepherd Solicitors, said the extension of the March 31 deadline for three months would allow transactions currently underway to take place without the worry of paying the additional tax.
The Treasury announced last July that it would temporarily raise the stamp duty threshold from £125,000 to £500,000 for property sales in England and Northern Ireland to support the economy through the COVID-19 crisis.
It had been due to revert to £125,000 from April 1 but will now drop to £250,000 until the end of September before reverting to £125,000 from October 1.
Jonathan said: “The decision to extend the Stamp Duty Land Tax holiday comes as very welcome news for home-buyers currently stuck in chains and facing a cliff-edge at the end of March.
“A number of those chains would have collapsed as buyers found themselves with transactions they could no longer afford because of the additional tax.
“The sheer volume of transactions underway at the moment, combined with delays at mortgage lenders and others affected by home working, has led to a bottleneck in the market at just the wrong time, and this extension should give some time for that blockage to clear without affecting those who may have been unable to pay the added SDLT.
“The reduction of the nil band rate to £250,000 until the end of September will also help provide confidence to home buyers and the market.”
Jonathan advised buyers to act early to avoid being caught out when the extension on the stamp duty holiday changes and then stops later this year.
He said: “This SDLT holiday will eventually come to an end, and the same ‘cliff-edge’ will reappear.
“It is important that buyers act early to avoid being caught in that position. Transactions are taking longer in the COVID-affected world than they did before it.”
A recent analysis by Halifax found that houses prices jumped by £57,000 across England and Wales as home-buyers rushed to make stamp duty savings before the March 31 deadline.
It found the average stamp duty saving made by home movers was £11,566.
Other measures to benefit homebuyers which were announced in the Budget by Chancellor Rishi Sunak included a mortgage guarantee scheme to encourage home ownership and help buyers with deposits of just five per cent to get on the property ladder.
