Buyers have until the end of this month to complete their property purchases if they wish to benefit from the stamp duty holiday. The stamp duty cut was extended from the initial end date of 31st March to 30th June, and after this month, the tax break will start to be phased out until 1st October.
For Welsh homebuyers, the tax cut means that the first £250,000 of the price paid for a residential property in Wales will continue to be free from Welsh stamp duty, provided that the transaction completes by the end of June 2021. In England, the threshold to which a homebuyer starts paying stamp duty was now at a £500,000 purchase price.
According to Rightmove, it is likely that many of the 704,000 sales going through the conveyancing process in Britain, nearly twice the previous high of 428,633 in May 2017, will not complete in time to take advantage of the government’s temporary tax change that saved buyers up to £15,000.
Will house prices fall in 2021 when the stamp duty holiday ends?
There is no doubt that the stamp duty holiday created a mini-boom in the UK property market when it was first introduced in July 2020. According to recent figures released by HM Revenue and Customs, a total of 105,630 residential transactions took place in October 2020, making it the busiest October in at least a decade.
Even though the stamp duty cuts benefited some of the property market, there are other well performing factors that cast some positive light for future house prices and activity. The economy seems to be recovering well, and the vast rollout of the COVID vaccination has allowed lockdown restrictions to ease. As the economy, and construction and property industries, begin to return to some form of normality, we could see a steady increase in property purchases even when the stamp duty holiday ends.
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