Estate agents, developers, surveyors and solicitors are asking the government to extend the current stamp duty holiday by a further six months, as homebuyers face a race against time to complete their house moves.
The stamp duty holiday has lifted the property market and increased property sales significantly, but will the government be extending the deadline beyond 31 March 2021?
What is SDLT?
Stamp Duty Land Tax (SDLT) is a tax payment that is charged when buying a property or piece of land that is more than a set amount. The price you pay for stamp duty land tax usually differs based on many factors, including the purchase price, type and location of the property being sold.
As of July 8th 2020, the government increased the SDLT threshold in England and Northern Ireland to property sales up to £500,000. This means that currently anybody looking to purchase a new property could save up to £15,000 if they buy their home before March 31st 2021.
After the UK officially entering a recession back in August, the property market has remained integral to rebuilding and developing the economy. There are currently over 140,000 property sales in the pipeline (Zoopla, 2020), which is double the number usually seen for this time of year.
Should the SDLT holiday be extended?
With the introduction of the government’s second lockdown, property experts are calling to expand the holiday, as it is proving more difficult for people to sell their homes.
Yet, even after a group of property professionals wrote to the Chancellor, the Housing Minister Christopher Pincher has maintained that the Government has no intention to extend the deadline.
On the other hand, the coronavirus pandemic has created unprecedented times, and there have been many U-turns from the Government, including the extension of the furlough scheme.
There is no denying how critical the SDLT holiday has been to the property market. However, with extended waiting times due to the second lockdown, the Government is at risk of allowing hundreds of thousands of people to miss out on reaping the benefits of the SDLT cut.
In extending the stamp duty holiday, the UK Government can reduce the risk of a hard stop of cash while easing pressure on lenders and conveyancers who are experiencing a high level of demand.
Innovation 4 Business
Even if the SDLT holiday is not extended, there are a number of ways you may be eligible to reduce the price you pay.
Every year, thousands of people across the country overpay their SDLT on both commercial and residential properties, simply due to misclassification of their property.
Even if you have already paid, you may be able to recover your overpayments. The amount you can save is dependent upon the property type and tax paid to HMRC, but in some cases, it is possible to achieve up to 80% reduction in costs.
At Innovation 4 Business, our experienced consults offer pre-completion advice on upcoming property transactions, post-completion reviews of historical property transactions and advice on how to restructure your property portfolios including inheritance tax (IHT) and capital gains tax (CGT) advice.