Will the stamp duty holiday be extended?

If you are in the process of buying a property, you may have considered whether you will be able to take advantage of the stamp duty holiday, allowing you to save up to £15,000 on your property purchase. In this article, we look at the possible extension of the stamp duty holiday and the potential impact for buyers and sellers on how transactions will proceed. 

Stamp duty holiday - demand and delays

The stamp duty holiday was introduced to stimulate the property market and means that until the end of March 2021, the level at which stamp duty is charged on a residential property has been raised to £500,000. However, arguably, the scheme has been too successful, putting pressure on the industry as more people race to take advantage of the tax break.

Coupled with operations restrictions, the stamp duty holiday has slowed almost every part of the conveyancing process. Surveyors, mortgage lenders, search agencies and conveyancing lawyers are struggling to meet demand which means that the average property transaction completion time has increased from 12 weeks to 16 weeks. As a result, new buyers are unlikely to meet the March 31st deadline to take advantage of the stamp duty holiday.

Will the stamp duty holiday be extended?

The government has stated that it has no plan to extend the stamp duty holiday long term but may extend it by six weeks to account for delays in the process. However, during the pandemic, the rules often change at the last minute. There have been suggestions that the Chancellor could allow transactions which have passed a certain point in the process to continue without the buyer being liable to pay stamp duty even where they exceed the March deadline. Further tax announcements are expected as part of the Budget, scheduled for March 3rd.

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