Following the result of over 100,000 signatures on an online petition to extend the stamp duty land tax holiday, parliament announced that MP’s will debate extending the holiday on 1st February 2021.
The stamp duty land tax holiday was introduced last year to try and keep the housing market stable during the coronavirus pandemic. The Chancellor increased the threshold from £125,000 to £500,000 until 31st March 2021. By increasing the threshold, it allowed for higher consumption as many took advantage of the tax savings.
The strength of the housing market increased in 2020, following the announcement of the stamp duty land tax holiday. In the second half of 2020, agreed sales were up 47% compared to the same 6-month period in 2019.
Many however, are set to miss out on the tax savings as higher demand has meant that the average completion time has increased from 90 days to 4 months. It is estimated that around 70,000 sales agreed in 2020 could miss the cut off date.
Sellers are now cautious about failing to complete the sale before the deadline and incurring an unexpected tax bill. As a result, there has been a 6.4% decrease in the number of homes for sale, as of 17th January 2021.