As recently leaked to The Times, the Chancellor Rishi Sunak has today unveiled a temporary extension to the stamp duty holiday as part of his Budget announcements.
The holiday was first introduced last summer as part of the Government’s economic response to the Covid-19 pandemic. Since then, buyers have benefitted from stamp duty not being levied on the first £500,000 of their residential property purchases (n.b. the 3% surcharge has continued to apply to second homes), with the result that most transactions under this threshold attracted no duty at all and those above it received a tax savings of £15,000.
Market commentators have been busy analysing the potential impact of the holiday on the property market, with most reporting an upsurge in both activity and property prices. It had been due to expire on the 31st March, but this has now been put back to the end of June, nominally to allow time for transactions that are already ‘in the system’ to be completed.
Beyond that, the relief will taper so that for transactions completed between July and September, stamp duty will not be levied on the first £250,000 (resulting in a much more modest saving per transaction). In October, this will revert back to the £125,000 figure.
Alongside the extension of the SDLT holiday, Mr Sunak also set out plans for a mortgage guarantee scheme to maintain stimulation of the home moving process, with mortgage lenders being incentivised to return to the days of 95% mortgages, allowing buyers to borrow more and buy properties with a lower cash deposit.
Hewitsons have boosted our team in recent weeks with the addition of Catherine Bolland, as we seek to keep pace with demand for our residential property offering. The team is based in our Cambridge office but have been working electronically since before coronavirus struck, so remain fully available to meet clients’ needs and provide a seamless service.
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