Looking To Buy Your Dream Home? The Perfect Time Could Be NowBy: Michael Mbanunu
Stamp Duty Extension
AFFORDING YOUR DREAM HOME HAS BECOME EASIER…
Announced last summer by Chancellor Rishi Sunak, Stamp Duty Holiday was initially meant to end on 31st March 2021. Leaving a so-called cliff-edge whereby many people would end up coughing up the Stamp Duty they thought they wouldn’t need because their transaction wouldn’t complete in time.
But huzzah! Rishi Sunak has now extended the deadline by an extra 3 months. This will allow the majority of those transactions to complete. It also provides an opportunity for new transactions to enjoy the Stamp Duty Holiday. But a word of caution, you will need to act fast and enter the transaction with the understanding that you may not complete it by 30th June and will need to pay the additional Stamp Duty.
‘This could help many home buyers to buy homes this summer without paying the extra taxes.’
What is a Stamp Duty Holiday?
But we’re getting ahead of ourselves. We must first ask what Stamp Duty is and why it’s brought happiness to a lot of home buyers’ lives. When a Homebuyer purchases a property, they’ll have to pay Stamp duty Land tax (SDLT), which varies depending on how expensive the property is.
It has been reported that due to the Stamp Duty Holiday, “from June, the first £250,000 of the purchase price will be exempt from the tax before the allowance returns to its pre-pandemic level of £125,000 from the start of October.” This means during these next 3 months people will be saving a lot more money when moving! SDLT has always been a significant factor and hindrance to people buying property. Fortunately, due to the Stamp Duty holiday extension, people can save money and have more time to hit the deadline.
Benefits of Extension
We’ve seen how the effects of Covid have partially affected home buyers. Thanks to the extension, many people see this as the green light to buy that dream house. Reports have shown that “46% of house sales in England to the end of September will benefit from full or partial stamp duty exemption.”
With a reported “70,000 buyers” set to miss the earlier SDLT deadline, it’s no wonder millions of people are going out their way now to take full advantage of this opportunity to renovate their homes and purchase a new home! This has also been helpful for the housing market.
There’s going to be downsides, as with everything in life, with these extensions, there are no exceptions. For instance, while it has been highly beneficial for new buyers, it can cause “immeasurable” pressure for the property market. It can also create a need for people to make rash decisions to hit the deadline, leading to stress, not only for buyers but also the sellers. We may see house prices increasing, but at least a new Government scheme has been introduced, which has encouraged leaders to revisit 95% mortgage deals which should be beneficial for first-time buyers.
This STDL extension has become the window of opportunity for new cautious buyers to make that move to find their dream home. The extension will encourage more transactions and sales, which is necessary as the property market holds great value to the economy. This move was garnered as playing a pivotal role in the roadmap of recovery. So, what are you waiting for? Go buy that house now!