Will the stamp duty holiday be extended again?

When we entered our first lockdown, a stamp duty holiday was introduced. Normally stamp duty land tax (SDLT) is only applied on properties over £300,000 (for first-time buyers). However, this was extended to £500,000. 

When the second lockdown was announced, there was an extension to this. However, now we are in our third lockdown, and the government has not confirmed a further extension.

Many are calling for an additional 6-month extension beyond the 31st of March. If you agree and wish to pledge your support, please click here to sign the petition.

In response to the first 10,000 votes, HM Treasury said, “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The Government does not plan to extend this temporary relief.”

The petition now has over 100,000 votes, which means it can be considered for parliamentary debate.

 

The Stamp Duty Holiday explained

The Stamp Duty Holiday runs from 8th July 2020 to 31st March 2021 and offers:

  • Zero land tax on the first £500,000 of the property’s value
  • 5% on the next £425,000 (£500,001 to £925,000)
  • 10% on the next 575,000 (£925,001 to £1.5m),
  • 12% on any portion above £1.5m

After the 1st of April 2021, first-time buyers stamp duty will be:

  • Zero land tax on the first £300,000
  • 5% on the next £200,000 (£300,001 to £500,000)

After the 1st of April 2021, non-first-time buyers stamp duty will be:

  • Zero land tax on the first £125,000
  • 2% on the next £125,000 (£125,001 to £250,000)
  • 5% on the next £675,000 (£250,0001 to £925,000)
  • 10% on the next £575,000 (£925,001 to £1.5m)
  • 12% on any portion above £1.5m

This means that first-time buyers purchasing a £500,000 home will pay £10,000 stamp duty. Non-first-time buyers will page £15,000 stamp duty on a home with the same purchase price. 

How to arrange finance before the Stamp Duty Holiday ends

As we now draw nearer and nearer, the deadline for buyers to make the most of this is quickly approaching, and some even now may not be able to secure the sale/get a mortgage approved/agreed in time, leaving bridge loans as their only option for quick short term finance such as a bridging loan.

Bridging loans are a short term loan used for property development and adding value to properties or by people who want to move before their property chain completes. Bridging loan rates are higher than mortgage rates, but you can use them while you arrange a regular mortgage so that you can benefit from the Stamp Duty Holiday.