There are plenty of us out there who have had to cancel their holiday plans this year. So even the sight of the word ‘holiday’ might have brought on a feeling of frustration. If that was the case reading this headline…well, we’re sorry.
But in the mortgage world, the big holiday that’s been discussed this year has been the Stamp Duty Holiday. It’s something that’s been talked about in the mortgage world for a while, and there’s a few months left of it yet.
But with life feeling increasingly like Groundhog Day given the lockdowns we’ve had, the end of the Stamp Duty Holiday may well sneak up on us. That is if the end does indeed come. There are some things in the fire that may see the Stamp Duty Holiday will continue for a little while longer…
What is the Stamp Duty Holiday?
Firstly, it’s probably best to clarify what Stamp Duty is…
Stamp Duty is a tax levied on single property purchases. In the UK, it was introduced in 1986 but underwent a major change in 2017. This saw Stamp Duty abolished for first time buyers looking to purchase properties costing less than £300,000.
For other buyers, it’s an additional cost when buying a home which needs to be considered and factored in.
In July 2020, as a reaction to the effects of the Coronavirus pandemic on the housing market, a temporary Stamp Duty Holiday was announced by the Chancellor of the Exchequer.
This applied to any property purchase of less than £500,000, and has likely encouraged people to continue with their home move plans despite the tumultuous times we’ve been living in.
When’s it set to end?
The Stamp Duty Holiday will continue until 31st March 2021. So there’s a few months left until the holiday is set to end, if indeed it does…
Might it be extended?
This is a possibility that has been discussed within the mortgage industry of late. The holiday’s abrupt culmination at the end of March 2021 may not be quite as definitive as it once seemed.
A petition has been launched to help provide potential buyers with further opportunities to purchase their dream home thanks to the Stamp Duty Holiday being extended for an additional six months.
Because of the financial effects of the pandemic, it is hard for many potential buyers to know exactly what their personal situation is on a consistent basis. This naturally affects whether they can safely proceed with their property purchase or not.
But if a house move in 2021 is on the cards but is reliant on costs staying as low as possible, the reintroduction of the Stamp Duty tax may well put some people off or see additional delays.
If the holiday is extended however, that extra incentive to proceed with a house purchase, safe in the knowledge that Stamp Duty will be avoided, could see more housing purchases going through. This in turn could galvanise a housing market that’s been hit hard by the pandemic and the various repercussions of it.
Things to consider
Firstly, there’s still time to take advantage of the Stamp Duty Holiday. The end of March 2021 remains a fair way away. So if you’re looking to complete a house purchase soon, you can certainly capitalise on the opportunity that the holiday presents and save yourself some significant expenditure. But be quick, the process to complete on a house purchase is not a quick one, usually a few months, so you will need to act now.
Secondly, the petition is there to be signed if you are keen to see the holiday extended. Theoretically, the more names put on it, the more likely the government is to sit up and take note of what people are calling for. Whether they will be willing to essentially write off potential tax payments given the financial deficits the pandemic is causing is hard to say. But signing the petition will certainly not do any harm.
Thirdly, anything to support the housing market and get it back into a safer place in 2021 should be welcomed. If extending the Stamp Duty Holiday is likely to do this, then that’s all for the greater good.
Plenty to mull over if you’re a freelancer or contractor looking to complete a house move soon then. We’ll have to see what happens, but if the holiday extended and the housing industry benefits, it really is a win-win.