Introduced last year as a response to the pandemic, the chancellor’s tax concession means no stamp duty land tax (SDLT) is paid on the first £500,000 of a property sale. However, all rates are set to return to their pre-pandemic thresholds on 1 April.
For buyers this will mean the end of a tax saving of up to £15,000.
Data compiled by Zoopla for the BBC suggests that between 70% and 82% of sales would be stamp duty free if they completed by the end of March.
The stamp duty holiday and pent up demand created a surge in activity for the housing market. In turn, that meant professionals in the sector, from surveyors and solicitors to local councils and estate agents, were all busy.
The extra workload, at a time when many faced COVID-19-related staff shortages and practical working restrictions, meant delays in the house-buying process.
Nearing the cliff edge
For those properties already in the system, potential buyers face paying thousands of pounds in SDLT if they fail to complete by the 31 March. Estimates suggest that as many as 300,000 sales may fall through if not completed before the stamp duty break ends.
Experts at Zoopla predict that there will be a sudden drop-off in sales, with an expectation of 20% fewer transactions between April and June compared with the first three months of the year.
That so-called cliff-edge has prompted interested parties to lobby the Chancellor, Rishi Sunak, to extend the tax break.
But will this just be delaying the drop?
Beth Rudolf, from The Conveyancing Association, said: “What we’d really like is for anybody who is already in a transaction to still receive the stamp duty concession when they complete. It is all about trying to bring fairness back.”
This so-called tapering, to allow buyers ready to complete to benefit, could stop the sudden drop in activity. It may also stop buyers from applying pressure on sellers to drop their price by the stamp duty amount to ensure a sale.
A Treasury spokesman said: “The temporary stamp duty cut is helping to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity.
“Its time limited nature is what has encouraged people to take advantage of the scheme.”