This was done out of necessity, as many families were struggling during the pandemic crisis. The break was only temporary, which was set to expire soon. By reading on, you can learn all about the stamp duty tax and what you need to know about this extension.
The Stamp Duty Land Tax is a tax that someone pays upon purchasing property or land in England and Northern Ireland. Over the course of last summer, this tax was temporarily increased the amount of tax that is paid for property taxes to £500,000. There was a tax break in place, which was set to expire on March 31st. However, this break has been extended to June 30th.
After this extension ends, the stamp duty will start out at £250,000 until September ends. Then, the stamp duty will get back to the original threshold and will be paid on any property that is sold for over £125,000.
What does this extension mean to you? It means that anyone who goes through the process of purchasing a main residence of up to £500,000 prior to the deadline extension expiring, they won’t be responsible for any stamp duty. Any property that is more expensive than £500,000 will still be subject to the stamp duty for any value over that threshold.
The stamp duty was originally suspended to help buyers who may have suffered from financial setbacks due to COVID-19. The goal was to boost the property market that suffered from a major hit due to the lockdown. They decided it was best to extend this Stamp Duty Holiday as a way to create a smoother transition to normalcy, returning everything back to normal on October 1st.
Why did they decide to extend the holiday? One reason is because the completion dates for both sellers and buyers have been impacted. By offering this gradual tapering off process, it gives people time to adjust to the stamp duty again without having a steep drop-off happen unexpectedly. People were in the middle of the process of buying and selling homes, trying to beat the deadline so that they don’t have the stamp duty sneak up on them.
Another reason why this extension is happening is to help create another boost to the property market. This can reinvigorate buyers and sellers with the nicer weather coming, encouraging them to stick with the process to find the perfect property or land for them. If people were going to back out of purchases due to the stamp duty tax holiday ending, this would encourage them to stay in the market and purchase property.
The Stamp Duty Tax Holiday was an important move that was put into place to help boost the property market during a time when other industries were struggling. This would help encourage buyers to move ahead with purchases, without worrying about the stamp duty. The extension is a welcome relief for buyers who didn’t want to miss out on their dream property as the deadline inched closer.
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