On Monday MPs discussed extending the Stamp Duty Land Tax Holiday after the UK government’s website secured enough signatures for it to be debated in Parliament.
The petition, called Extend the Stamp Duty Holiday for an additional 6 months after 31st March 2021 had attracted more than 140,000 signatures.
However, following the virtual debate it is not clear whether the Stamp Duty Holiday will be extended, but some commentators believe there is a chance that the government may have a phased finish rather than the holiday abruptly expiring on March 31.
Back in July, the government suspended Stamp Duty Land Tax on the first £500,000 of all property sales in England and Northern Ireland. Prior to this the tax was paid on land or property sold for £125,000 or more, while first-time buyers did not pay any stamp duty up to £300,000. The holiday replaced the first-time buyer discount.
The purpose of this was to help buyers who had taken a financial hit because of the coronavirus crisis and to boost the property market, which had seen house prices fall for four months in a row.
The move clearly made an impact on the housing market as according to the Nationwide Building Society, UK house prices climbed 7.5% in 2020 – the highest growth rate for six years.
Jon Coles, who co-heads of the Residential Property team at Phillips Solicitors, said: “We, like many other law firms, have found that we have had to deal with an unprecedented number of enquiries since the tax holiday was announced.”
“Unfortunately, many law firms have been struggling to cope with the huge volume of emails and telephone calls they receive from clients and estate agents, all of whom are quite understandably anxious to know the current position. Sadly, there have been reports that the mental health of many conveyancing professionals has been under strain while they work long and unsociable hours to deal with the demand.”
While delays in property transactions can be frustrating and stressful for all concerned, Jon points out that there are many factors that limit the speed of property transactions due to lockdown measures, which are out of the control of law firms control, such as delays in the issuing of search results and delays in mortgage offers being issued.
“Here at Phillips, we have all been working under a great deal of pressure doing our utmost to help our clients move ahead of the deadline,” said Jon, “We will most certainly continue do our very best for our clients, but to be frank, it is unlikely that any new clients wishing to buy their property now will be able to beat the March 31 deadline, unless the government extends this for those who have already instructed law firms.”
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