The potential effects of reintroduction

Once the stamp duty tax is eventually reintroduced, homebuyers will be affected by the following payments on properties:

• Nothing on properties purchased for up to £125,000
• 2% on the portion of a property between £125,001 and £250,000
• 5% on the portion between £250,001 and £925,000
• 10% on the portion between £925,001 and £1,500,000
• 12% on the portion costing more than £1,500,001

As a result of this, many experts suggest that there will be a slump in demand. This is because many buyers have already rushed to purchase a property while the tax holiday is still going, rather than waiting until later in 2021.

Furthermore, the end of the stamp duty holiday coincides with the end of other financial support schemes – including:

• Bounce Back Loan Scheme
• Coronavirus Business Interruption Loan Scheme
• Covid-19 Corporate Financing Facility

The end of these schemes will result in more UK companies having less cash available. This means that there will be many redundancies across the country – with lots of the affected individuals therefore being unable to pay the newly reintroduced stamp duty tax, because they don’t have money coming in from a job.

On the other hand, some property developers are attempting to combat the anticipated forthcoming slump by offering to ‘extend the stamp duty holiday’, and covering costs up until October 2021 themselves.

It is crucial that this kind of innovation continues from developers, if the property market is to maintain its positive performance.