Will End Of Stamp Duty Holiday Damage The Property Market?

• Published date: 05 July 2021
• Subject Matter: Real Estate and Construction, Conveyancing, Real Estate
• Law Firm: Shoosmiths
• Author: Mr Suman Dally

Wednesday June 30 2021 is when the Stamp Duty 'holiday' in its current form at least will end. The Chancellor, Rishi Sunak, introduced the temporary Stamp Duty Land Tax (SDLT) in July 2020 to boost the housing market following the first national lockdown. The aim was to save buyers from paying stamp duty on any properties valued at up to '500,000 - a saving worth up to '15,000.

Record completions

A combination of the SDLT tax break with pent up demand and a lockdown-inspired desire for more (particularly outdoor) space means that the housing market has been at its busiest for almost a decade. Shoosmiths has certainly experienced a record number of completions for its clients (in normal circumstances it's national conveyancing teams complete in the region of 10,000 transactions a year).

Not quite the end for SDLT relief

However, Suman Dally, Head of Shoosmiths National Conveyancing service, points out that, strictly speaking, it's not really the end of the SDLT holiday on 30 June:

'The scheme runs to end September although there is substantial tapering from July where only '2,500 can now be saved on the value of a purchase over '250,000 (presently up to '15,000 can be saved on a purchase over '500K.). The nil rate band then settles back to '125,000 from 01 October 2021.'

Future impact on the property market

There is no doubt that the Chancellor's stimulus to the wavering housing market back in July 2020 had precisely the effect intended, to further fuel rising demand. But that demand outpaced supply...