Stamp Duty Land Tax (SDLT) is a tax levied on properties in England and Northern Ireland, and currently the Government has raised the threshold for Stamp Duty due to the pandemic. This means until March 31, 2021, the Stamp Duty threshold for residential properties is £500,000. However from April 1, 2021, the Stamp Duty threshold will change back to £125,000 for residential properties.
The Stamp Duty holiday has incentivised many people to move home in recent months.
With the threshold raised to £500,000, people have been able to save up to £15,000 which previously would have been spent on Stamp Duty.
With only a few months left of the Stamp Duty holiday, many are urgently trying to complete their house purchases before the deadline.
The Government has faced significant pressure to extend the Stamp Duty holiday past the March 31 deadline, but so far the Government has not suggested the holiday will be extended.
READ MORE: House prices start to soften as Stamp Duty holiday draws to a close
However people who miss out on the Stamp Duty holiday might not be worse off after the deadline passes.
Caroline Hughes, property expert and founder of personal finance life planning tool Lifetise, told Express.co.uk: “The Stamp Duty holiday had a big impact on house prices going up, but these have cooled as we get closer to the end of the holiday period.
“So even if you don’t get in before the period ends, you may find that you save almost as much money if prices go down after the Stamp Duty holiday ends.
“Sellers right now are keeping their prices high, but they may be more willing to drop the asking price after the holiday ends.”
First-time buyers pay no Stamp Duty on their purchases up to £300,000, and five percent Stamp Duty on the portion from £300,001 to £500,000.
Ms Hughes explained how the end of the Stamp Duty holiday may not impact most first-time buyers.
She said: “Those set to benefit most from the Stamp Duty holiday are existing homeowners, rather than first- time buyers, as they are the ones most likely to face heftier Stamp Duty bills. So the race to beat the deadline is more urgent.”
Ms Hughes added: “The majority of first-time buyers need not be concerned about the end of the Stamp Duty holiday.
“Although there has been a lot of hype around it, the reality is that it doesn’t really benefit most of them at all.
“For the majority, the cost of their first home will be less than £300,000 so they wouldn’t be required to pay Stamp Duty anyway.
“Plus, when you consider the fact that the holiday has led to an increase in house prices, combined with a lack of five and 10 percent mortgages available, it actually leaves first-time buyers worse off.
“With that in mind, the end of the scheme in March is likely to be a positive as we expect it will result in a drop in house prices and therefore make buying a first home more affordable.”