Stamp Duty Holiday – to Be Extended or Not?

The break, known as stamp duty holiday, allowing buyers not to pay the stamp duty tax if the property they purchase costs less than £175,000, will no longer be available at the end of this year. On average, UK house buyers, who are taking out a mortgage with a 25% deposit, can expect a discount of £1,750, which, under current economic conditions, is a significant amount. This is the reason why mortgage brokers and other industry professionals say that it is high time for people planning on a property purchase to act. It is widely known that the process of property purchase takes several months, which means that little time is left to take advantage of the stamp duty tax, says Mr. David Hollingworth, representative of L&C mortgage brokers. He is also determined that another impetus for people to make their buying decision as soon as possible is the UK house prices, which are now starting to rise slowly. The good news is that the government might prolong the stamp duty holiday as it has already proved to be a significant booster to the British mortgage market. Official data shows an increase in the number of recently approved mortgages for first-time buyers, as well as slight increase in house values. According to head of mortgages department at BestInvest, UK financial advisor, Mr. Peter O’Donovan, the extension of the stamp duty break will benefit the mortgage market greatly as it has already contributed a great deal to its recovery. He added that in case the Government decides to end the holiday, it should be done wisely so that all buyers end up paying the same amount. Let us remind that at the moment the stamp duty tax is divided into several tiers: 1) Property value £0 - £175,000 – Stamp Duty Tax 0% 2) Property value £175,000 - £250,000 – Stamp Duty Tax 1% 3) Property value £250,000 - £500,000 – Stamp Duty Tax 3% 4) Property value £500,000 and up – Stamp Duty Tax 4%. Further information on the stamp duty – extension of the break or any other changes – will be announced this autumn in the pre-budget report.