Monday, May 23, 2022
Real EstateUK

Buyers to abandon purchase if they miss stamp duty deadline

stamp duty

Under the scheme, those buying a property at less than £500,000 will not pay any stamp duty, while those buying more expensive homes will pay tax on the amount exceeding £500,000

Almost a third of home buyers would abandon their purchase if they missed the 31 March deadline for taking advantage of the Government’s stamp duty holiday, according to a new survey.

The survey asked 1,000 people who were currently in the process of buying a home whether they would continue with their purchase if the sale did not complete before the deadline.

Of those, 31 per cent said they would not. The question was asked by the Guild of Property Professionals.

The average value of these properties was £232,500, meaning the buyer would face a stamp duty bill of £2,150 – unless they were a first-time buyer.

If buyers are unable to complete because of not having the stamp duty money in place, we will see a large number of transactions fall through as a result, said Ian McKenzie, chief executive of the Guild of Property Professionals.

Under the scheme, those buying a property that costs less than £500,000 will not pay any stamp duty.

Those buying more expensive homes will only start to pay the tax on the amount that they pay for the property above £500,000. Previously, that threshold was £125,000.

This current holiday applies whether you are buying your first home or have owned property before.

The scheme was launched in July 2020 and was intended to stimulate the housing market which took a hit in the early days of the pandemic.

For example, property transactions fell by around 50 per cent during the first national lockdown.

According to the Treasury, housing transactions have increased since the relief was introduced and were 8 per cent higher in October 2020 than October 2019.

Calls are now being made for the stamp duty holiday to be extended.

Almost 25,000 people have signed a petition on the issue, and property experts are in agreement.

According to estate agent Hamptons International, 100,000 more homes would be sold if the stamp duty holiday was extended until the end of 2021 – a 10 per cent increase on what would normally be expected.

An extension could see transaction numbers in Britain next year bounce back to 2016 levels, or around 1.2million sales, says Aneisha Beveridge, head of research at Hamptons.

She said, pushing back the end of the stamp duty holiday would not only help those who may miss the current deadline by a small margin, but it will particularly help first-time buyers and second-steppers in more expensive parts of the country.


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