Since the launch of the stamp duty land tax holiday in July, the property market has boomed. Along with the release of pent-up demand sparked by the first national lockdown, homebuyers came flooding back to the market. But with the planned deadline of 31 March 2021 fast approaching, many hoped to see an extension. With thousands of transactions currently underway, industry professionals looked to the government to extend or taper the deadline, so as many could benefit from the tax savings as possible.
In response to an official petition launched on the parliament website, the government has confirmed there will be no extension. The petition, which has over 23,000 signatures at the time of writing, suggested an extension would stabilise the market. But although it gained support from industry professionals and homebuyers alike, the Treasury has announced that no extension, or tapering, is planned.
“The government does not plan to extend this temporary relief.
“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 in 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 feeling of disappointment has been felt throughout the industry. Professionals now face a bottleneck of cases to push through, with delays being felt throughout the conveyancing process. With the market continuing to react to the news, many are urging the government to reconsider. In the meantime, homebuyers are being urged to move quickly if they want to benefit from the savings afforded by the stamp duty land tax holiday.
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