The stamp duty holiday was introduced by the government in July last year. The aim was to kickstart the housing market and help buyers struggling after the ravaging effects of the coronavirus pandemic. It has helped many people get on the property ladder.
However, one group of homebuyers claims that rather than assisting them, the scheme has punished them. These are the buyers who completed their purchases during the difficult period of lockdown prior to the chancellor announcing the stamp duty holiday in July 2020.
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What was the stamp duty holiday?
Stamp duty is a tax that you have to pay when you buy property or land worth over a certain amount in England or Northern Ireland. The amount at which you have to pay stamp duty is £125,000. However, first-time buyers have a higher stamp duty threshold of £300,000.
From 8 July 2020 to 30 June 2021, there was a stamp duty holiday, during which buyers didn’t have to pay stamp duty on property worth up to £500,000. That meant that buyers could save as much as £15,000 on stamp duty when buying a house.
Can you get a refund if you completed before 8 July 2020?
Sweeping changes to stamp duty were announced by the chancellor on 8 July 2020. They came into effect the same day.
Those who completed their purchases in the difficult period between the start of lockdown in March and the announcement of the stamp duty holiday in July could not access this benefit. Unsurprisingly, they were keen to find out whether they could claim a refund.
It was quickly established that they could not.
How has this affected people? One frustrated buyer’s story
Those who completed during the difficult period before 8 July have been left feeling shortchanged by the economic challenges of the pandemic.
Take the case of one of our readers who sent us an email.
She was one of the many who bought a property during the challenging period between March and July. Unfortunately, that meant that she had to part with up to £5,000 in stamp duty.
As a struggling minimum wage earner, she says that this was a difficult amount to raise. In fact, she had to cash in a private pension and borrow the remainder from a friend.
She adds that owing to the pandemic and the challenges it presented, the house buying process was one of the most stressful periods of her life. However, she chose to push on and complete the purchase.
She explained, “I could easily have pulled out and waited as I’d been living in rented accommodation for nearly 20 years and could easily have stayed put.”
Now, she says that she feels punished for her perseverance. Many others feel exactly the same way. An online petition is calling the failure to backdate the stamp duty holiday a ‘slap in the face’ for buyers who choose not to pull out of purchases.
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Who else has been negatively affected?
Many people across the country have been left financially scarred by the government’s stance on the stamp duty holiday.
There are stories of people who chose to complete their purchases despite the challenges of the pandemic, only to later experience significant changes to their economic situation, such as reduction in wages, furlough or even job loss.
Will the government U-turn on backdating the stamp duty holiday?
It’s completely up to the government to decide whether to U-turn on backdating the stamp duty holiday.
Though the government has not shown any indication that it might backdate the scheme, it’s never too late. Retrospectively applying the stamp duty holiday, even to 15 May 2020, when house moves were permitted once again, could be a game-changer for many buyers.
