Now the Holiday’s Over – What Has Been the Impact of the Stamp Duty Tax Break?

As the stamp duty threshold reverts to its pre-pandemic level of £125,000, property experts have called for a review of this “outdated” tax. According to estate agency industry body Propertymark, the success of the holiday, means that ministers should look again the normal stamp duty thresholds.

Mark Hayward, chief policy adviser, said the holiday was responsible for,

“creating a healthy and flowing market which has encouraged more people to buy and sell”.

Adding,

“With the holiday at an end, it is now timely to review the outdated levels at which people start paying stamp duty to reflect market demand, average house price and wage growth, given the basic, pre-Covid rates have not changed since 2014.”

The stamp duty holiday meant there was no tax to pay on properties costing up to £500,000 between July 2020 and the same month in 2021. The threshold was then lowered to £250,000 until 1 October. The move brought a boost to a housing market which had ground to a halt during the first lockdown.

But according to figures from property portal, Zoopla, the average UK house price has risen by £17,000 since March 2020, outweighing any savings as a result of the tax break.

Propertymark’s own figures show that almost a fifth of homes sold for more than the asking price during the holiday, compared four per cent before it was introduced, and that transactions increased by a quarter during this period compared with the previous year.

While the holiday is over, a survey by the Building Societies Association has also found that a quarter of people think now is a good time to buy a new home. This is despite almost half of those surveyed (46 per cent) expecting further price increases in the coming year.

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