Hints at a Six-Week Stamp Duty Extension
With logjams in the house sale process meaning thousands of buyers could miss the stamp duty holiday deadline, the Chancellor Rishi Sunak is reportedly considering a six-week extension to the scheme.
According to the Telegraph, a time-limited extension, which would give buyers until mid-May to complete on their transactions, is a possibility. A source quoted in the paper said: “It is certainly the case that a lot of people would be caught in the completion trap if the holiday were to end when it is due to.”
The government announced the stamp duty holiday in July, raising the threshold at which the tax is paid from £125,000 to £500,000 – a move designed to restart the housing market after lockdown and benefit the UK economy as a whole. The introduction of the holiday was followed by a surge in demand and rising house prices.
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The level of demand, and coronavirus restrictions, created delays in the conveyancing and mortgage approvals system. Many buyers, who agreed their sales in the summer, are still waiting to complete and could be left facing an unexpected tax bill.
There have been calls from across the industry for Mr Sunak to extend the tax break. A petition to Parliament also appealed for an extra six-months to be added to the holiday. Mr Sunak is thought to oppose a long extension because of the cost to the Treasury.
Miles Robinson, of online mortgage broker Trussle, said: “The surge in demand has triggered long delays in the processing of transactions. It currently takes 134 days to complete on a property in the UK and it’s been reported that one in five buyers are facing more than a six-month wait for completion. Therefore, a potential six-week extension could prove invaluable to the estimated 100,000 property purchases currently underway.”