The chancellor Rishi Sunak has announced an extension of the stamp duty holiday in his budget on 3 March. The holiday will now end on 30 June 2021. Beyond that, the threshold at which buyers begin paying stamp duty will be set at £250,000 until 30 September – double the level at which the tax normally kicks in.
The move will mean relief for the tens of thousands of homebuyers whose transactions risked missing the original deadline of 31 March, due to delays and logjams in the conveyancing and mortgage approval systems.
The stamp duty holiday was introduced in July by the treasury, in an effort to restart the housing market after lockdown and boost the wider economy. It removed stamp duty on the first £500,000 of residential property transactions and meant buyers could save up to £15,000. The holiday led to a surge in demand and rising house prices as movers struggled to buy before the deadline.
Announcing the extension in the House of Commons, the chancellor said: “The cut in stamp duty I announced last summer has helped hundreds of thousands of people buy a home and supported the economy at a critical time.
“But due to the sheer volume of transactions we’re seeing, many new purchasers won’t complete in time for the end of March. So, I can announce today the £500,000 nil rate band will not end on the 31 March. It will now end on the 30 June. Then, to smooth the transition back to normal, the nil rate band will be £250,000, double its standard level until the end of September, and we will only return to the usual level of £125,000 from 1 October.”
In his budget, the chancellor also announced the launch of a mortgage guarantee scheme to help people with 5% deposits onto the housing ladder.
Read more about the budget announcements on the BBC website.