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The Stamp Duty Holiday has been extended
- AuthorMandeep Rai
What does this mean for you?
We at Johnson Astills are excited to welcome the government’s announcement confirming the extension of the stamp duty holiday to 30th June 2021.
What is the Stamp Duty Holiday?
The Stamp Duty Holiday was introduced on 8 July 2020 amidst the financial constraints posed on the economy because of the pandemic. The aim of the Stamp duty Holiday is to provide tax relief to purchasers who are replacing their main residency.
Anyone buying a main residence costing up to £500,000 will not pay any stamp duty if they complete during the holiday period. Even if the purchase price is above £500,000, stamp duty will only be paid on the amount exceeding £500,000. So, if the property price is £750,000, stamp duty will only be paid on £250,000.
Implications of the Stamp Duty Holiday extension
The holiday has meant that anyone replacing their main residence has saved thousands of pounds in Stamp Duty Land Tax. The extension means that more people can benefit from the temporary scheme.
The pandemic has greatly affected the conveyancing process, introducing unwelcome, but inevitable, delays: mortgage providers are taking considerably longer to issue mortgage offers, necessary searches are taking longer to come through because Local Councils and search providers have reduced staffing levels, and an increased demand for conveyancing services (selling and buying) makes it difficult to progress a transaction as quickly as usual.
The extension will give eligible buyers more of a chance to complete on their purchase before the holiday ends, saving them significant amounts of tax. The extension will benefit sellers too, as buyers will be incentivised by the tax saving to pay more for the property, and complete quickly.
Can I benefit from the Stamp Duty Holiday extension?
With the current climate, and the delays noted above, an average conveyancing transaction is taking 10-16 weeks, although much depends on the complexity and particular circumstances.
It is important to bear this estimate in mind if your sale has not been agreed already. To have the best chance of benefitting from the scheme it is advisable to have your sale agreed by 12th March 2021 at the latest.
Properties up to £250,000
Please note from July 1st, the holiday will apply only on properties up to £250,000 until the end of September. This means that the maximum saving for buyers from the start of July until the end of September will be just £2,500.00 - sizeably less than the £15,000.00 saving possible under the current holiday, which continues until the end of June.
At Johnson Astills we are here to guide and help you through the process of buying your new main residence during the Stamp Duty Holiday period. If your sale has been agreed our Conveyancing team at Johnson Astills can assist you and provide you with further information regarding any conveyancing queries. Please contact us at our Leicester Office or Loughborough Office on 0116 2554855 or 01509 610312.