On 8 July 2020 Chancellor of the Exchequer Rishi Sunak implemented a temporary stamp duty holiday that cut the rate of duty to zero for all properties £500,000 or under until 31 March 2021.
This saw a stampede of buyers across the market as people tried to take advantage of the tax break which led to mortgage approvals in October standing at the highest level since 2007.
However many buyers now face missing out with completion timescales likely to take them beyond the March deadline.
Responding to a petition to extend the relief – which was submitted to the government and signed by over 20,000 individuals – a spokesperson for HM Treasury said: “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The government does not plan to extend this temporary relief.
“The COVID-19 pandemic and subsequent lockdown caused uncertainty for those buying and selling residential property and property transactions fell by as much as 50% during the first national lockdown.
“To stimulate immediate momentum in the property market and to support the jobs of people whose employment relied on custom from the property industry, the government decided to introduce a temporary Stamp Duty Land Tax (SDLT) relief.
“This relief increased the starting threshold of residential SDLT from £125,000 to £500,000 from the 8 July 2020 until 31 March 2021. Since the relief was introduced, transactions have increased and seasonally adjusted data shows that in October 2020, transactions were 8% higher than October 2019.
“As the relief was to provide an immediate stimulus to the property market, the government does not plan to extend this relief. SDLT is an important source of government revenue, raising several billion pounds each year to help pay for the essential services the government provides.
The government is committed to supporting home ownership and helping people get on and move up the housing ladder. When the SDLT Holiday ends, the government will maintain a SDLT relief for first time buyers which increases the starting threshold of residential SDLT to £300,000 for first-time buyers that purchase a property below £500,000. In addition, a new Help to Buy scheme will be introduced from 1 April 2021. This scheme will run until March 2023.
“All tax policy is kept under review and the government considers the views it receives carefully as part of that process.”
