Developers and property industry experts have welcomed the Chancellor’s extension of the stamp duty holiday but urged the government to fully reform the tax in the future.
Rishi Sunak this afternoon confirmed that the higher stamp duty threshold of £500,000 will remain in place until 30 June – an extension of the original 30 March deadline.
He also announced that the end of the tax break will be tapered, with the threshold being lowered to £250,000 until 30 September, before resuming its normal level of £125,000.
Property platform Zoopla estimated that the extension to June means a further 234,000 buyers who have already agreed a sale will save an estimated £987m on stamp duty.
Rightmove property expert Tim Bannister said the extension will be a “huge relief for those people who have been going through the sales process since last year and were always expecting to make use of the stamp duty savings”.
“Our recent data shows one in five sales that were agreed in the same month the stamp duty holiday was first announced in July last year still haven’t completed, so this additional time will make a big difference to help those stuck in the logjam complete their purchase in time before the new end of June deadline,” he said.
Matthew Pratt, the chief executive of developer Redrow, also said the extension will be “welcome news to those buyers caught up in the home buying process and who may have otherwise missed out on a saving”.
He added that the “element of tapering between June and September will also be welcome to a number of new market entrants”.
However, Pratt said Redrow would like to see a “wholesale reform of this tax”.
“Stamp duty outside of the current holiday is a barrier to people moving home, and it shouldn’t be,” he said.
“Facilitating mobility is especially important to the UK’s recovery as we move out of the Covid-19 lockdown and people find themselves needing to move due to job changes and other important life stage reasons.”
He urged the government to consider permanently reducing the current stamp duty tax bands across all levels, including the higher bands.
“We believe the abrupt leap from the 5 per cent to 10 per cent tax band is particularly prohibitive.
“A lower, flat rate of tax across homes of all value would be much simpler and far less restrictive. It is right that first-time buyers get more support than others on paying stamp duty through any new regime as they don’t currently have any equity built up.”
Nick Leeming, the chairman of estate agent Jackson-Stops, added: “My hope is that this budget is now followed up by a progressive approach to taxation and reform which will support a thriving property market for years to come.”
Rightmove’s Bannister added that buyers who have recently agreed a sale now “have a race on their hands” to see if they can make use of the stamp duty savings.
However, he said: “Many with purchases over £250,000 will find that time is too tight to complete before the end of June and so shouldn’t be factoring this into their purchase.”
Vic Darvey, the chief executive of digital estate agent Purplebricks welcomed the extension but said it will still be “disappointing news” for many.
“Especially those who put their house on the market due to the promise of stamp duty savings and could still miss out on their dream home, if they don’t complete in time,” he said.