Comment: Movers love it, but is the stamp duty holiday extension a bad idea?
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The stamp duty holiday, eh? It’s been the hottest property topic of recent times, and as the rumours ramped up regarding its possible extension, we were keen to see exactly what Chancellor Rishi Sunak had planned.
Luckily for movers panicking over the rapidly approaching March 31 deadline, the rumoured three-month extension became a reality in last week’s Budget, with the temporary £500,000 nil rate band now ending on June 30.
The misery of conveyancing delays and long-winded local searches will no longer be so critical for movers reassured that the possible £15,000 tax saving is now much more likely to be theirs.
But that's not all. Instead of the dreaded abrupt return to the original £125,000 cut off, Rishi has tapered the end of the tax break, which will be phased out with an interim threshold of £250,000 over a further three months.
This won’t make much difference to movers in our famously not cheap area however, as it would only equate to a £2,500 tax saving on a £500,000-plus purchase.
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And given the average sale price in St Albans and Harpenden is comfortably in excess of half a million, that’s not a discount that’s worth hurriedly moving for.
But as Nick Ingle from Savills in Harpenden noted, the positive sentiment it will bring will benefit everyone.
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Critics believe it would have been wiser to limit the stamp duty holiday extension to those who already had sales agreed, rather than opening it up to new movers.
Allowing fresh sales to qualify will simply transfer the misery of missing out to another batch of movers further down the line, they say.
Of course, the ultimate win would be permanent stamp duty change. After years of calls for reform of the hated tax, maybe October will be the time?
As Ben Taylor, CEO of Keller Williams UK, said: “With the holiday bringing such huge benefit to the market, surely it’s time for the government to re-evaluate the tax charged on home purchases on a permanent basis?”
I can’t imagine many movers arguing against that.