A Recap Of The Stamp Duty ‘Holiday’
And What Lies Ahead
The residential property market has experienced an unprecedented boom since the Government first announced plans to put a ‘Stamp Duty holiday’ in place for property purchases, which has enabled and incentivised many buyers into action that would not have ordinarily been possible
Before we look at what lies ahead for the rates of Stamp Duty Land Tax (‘SDLT’) in England and Northern Ireland, it is important to look back at the roadmap we have been on.
On 8th July 2020, the Government announced an SDLT ‘holiday’ for the purchase of residential properties in England and Northern Ireland. Buyers could purchase property free from SDLT for £500,000 or less which amounted to a saving of up to £15,000.
The ‘holiday’ was initially meant to last from 8th July 2020 to 31st March 2021 but following the substantial increase in property transactions, combined with the concern that an end to the ‘holiday’ would see a considerable decline in activity.The Government then announced at the 2021 Budget that the ‘holiday’ would be extended until 30th June 2021.
There was much debate over how the Government could best handle the removal of the ‘holiday’, as many argued that a blanket removal on one date could cause ongoing transactions where buyers could only proceed on a no-SDLT liability basis, could fall through.
As a result, the Government have opted for a ‘tapered’ period from 1st July 2021 to 30th September 2021 which means that the ‘holiday’ remains on purchases up a value of £250,000 and from 1st October 2021 the SDLT rates will revert back to the same that were in place prior to 8th July 2020 with SDLT then being payable on purchases over £125,000.
Whilst the SDLT ‘holiday’ may have played a major part in the initial increase in demand for property sales and purchases, the gradual tapering and removal of the holiday does not seem to be slowing down the market whilst interest rates continue to remain low and people look to remain working from home on a more permanent basis.
Investment in development and new build houses is also on the rise and the signs look very promising for the property market for the foreseeable future. The Government is investing billions and reforming the planning system to deliver greener and better quality homes where they are needed faster. This will open up lots of opportunities for people to buy their own home.
In addition, the current Government appear to be committed to help more people own their own homes and is providing a number of routes to make this easier and more affordable. Such schemes include the First Homes Scheme, the Mortgage Guarantee Scheme, continuing SDLT relief for first time buyers, a new £11.5 billion Affordable Homes Programme aiming to deliver around 180,000 homes with around half of these available to purchase through shared ownership.
This is great news not only for first time buyers who can look to take advantage of the incentives but also for people looking to sell as this will create and sustain more buyers in the market.
The residential property market looks to remain buoyant for the foreseeable future and whether the transaction is time sensitive to meet an SDLT deadline or you simply just want the transaction to complete as soon as possible, our expert and hard-working residential conveyancing team at Forbes Solicitors LLP will ensure that the conveyancing process runs as smoothly as possible.
Michelle Thompson
Partner & Head of Residential Property
01254 222349
michelle.thompson@forbessolicitors.co.uk
forbessolicitors.co.uk
