So, the Stamp Duty holiday ends 31st March 2021, will it affect the UK housing market in particular the purchase and sale of affordable homes? There is the worry that because the government is not extending this stamp duty holiday, house sales might fall through if they are not done in time.
The first lockdown affected the housing market massively due to a number of reasons. These included, viewings not being able to go ahead and larger deposits needed for the sale to go through. Zoopla had reported that property sales were down by 70% due to the circumstances of house sales being halted at the time. 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 proving that this tax relief did work.
What if my application is still going through on 31st March 2021?
Unfortunately, if your house sale has not been completed by 31st March 2021 you will not benefit from stamp duty relief. This wouldn’t be ideal for those who have not included the stamp duty costs in their savings. This would mean that they may not be able to continue with the sale and they may have to say goodbye to their dream home. Thisismoney conducted a survey which found that 31% of would be home buyers would abandon their house move if their sale wasn’t completed by 31st March. However, this would also mean 69% of people would carry on their house move regardless of if the stamp duty relief is scrapped.
Should Stamp Duty be relieved in 2021?
Any more negative impact on the housing market would not serve us best in the future as the housing market has already struggled enough this year. However, we would likely see house prices go down if stamp duty is added back on. This is because many people may have increased the price of their property to compensate for the amount they would have lost due to the relief.
Will the government U-turn on the stamp duty deadline?
The government has said that they will not change their mind on the ending of the stamp duty holiday. However, with increasing pressure from petitions we won’t know until the deadline. Some people are hoping that because the budget will be announced before 31st March, they will still have the option to change this deadline. But in a response to the petition published on 10 December, the Treasury said it had no plans to do so.