A Salford estate agent has welcomed the extension of the stamp duty cut announced in last week’s budget.
Rishi Sunak announced the tax cut will be extended until June 30th in England, Northern Ireland, and Wales.
This was in a bid to avoid hundreds of thousands of house sales falling through.
The tax has been suspended on the first £500,000 of all property sales.
Thornley Groves Sales and Letting Director, Mathew Smith, said: ”Despite the
financial impact principally benefiting buyers, it’s the sales stock which is in short supply.
The Stamp Duty Holiday Extension Explained
On 3 March 2021, Chancellor Rishi Sunak announced that the Stamp Duty Land Tax (SDLT) holiday will be extended until 30 June 2021 after facing pressure to extend the deadline..https://t.co/Xzv6McLy4e pic.twitter.com/WLMUCdEtyN
— Allen Davies EA (@AllenDavies342) March 13, 2021
“Therefore, the immediate expectation is that it reignites optimism in the
seller’s market and increases the volume of valuations and new instructions maintaining the high
frequency of sales experienced.”
This tax holiday saw a surge in the market activity as many took advantage of the thousands of pounds they would be saving.
When introduced last July the scheme hoped to bring activity back to the market which was hit by the lockdown.
Although activity has been retained it has caused delays in the process of house buying therefore this led to Sunak bringing the extension in.
According to the Centre for Policy Studies (CPS), this has been the highest level since the 2007 financial crisis.
What does this mean?
House sales under £500,000 will not pay the percentage tax.
For those above the threshold, they will still pay a tax but it will be a new rate.
For example, a house costing £600,000 originally would have paid £20,000 in stamp duty but now it will be £5,000. This applies to homes brought between 8 July and 30 June 2021.
Once the extension is complete the threshold will begin the process of returning to its original level.
Between 1 July and 30 September, the threshold will be £250,00 and then will decline to the previous threshold of £125,000 on October 1st.
The extension is not the only Homeowner help the chancellor announced as there is a new “Mortgage guarantee”.
A 5% deposit scheme has been introduced to encourage and allow more people to become homeowners.
Lenders will be able to approve mortgages with a 5% deposit on homes under the value of £600,000.