Chancellor Rishi Sunak has announced that the government will extend the Stamp Duty holiday until 30th June with further tapering until September 30th.

In his spring Budget Sunak extended the temporary increase in the residential Stamp Duty Land Tax Nil Rate Band to £500,000 in England and Northern Ireland until 30th June 2021.

Then, from 1st July 2021, the Nil Rate Band will reduce to £250,000 until 30th September 2021 before returning to £125,000 on 1st October 2021.

The Chancellor said the Stamp Duty holiday, which was originally planned to end on March 31st, “has helped hundreds of thousands of people buy a home and supported the economy at a critical time. But due to the sheer volume of transactions we’re seeing, many new purchases won’t complete in time for the end of March.”

By extending the deadline the Government hopes to prevent thousands of purchases already in progress from falling through, once buyers realised they would miss the deadline and have to pay Stamp Duty. Now they have longer to complete their purchase.

Rachel Springall, finance expert at Moneyfacts.co.uk, said: “Borrowers hoping to take advantage the stamp duty holiday will be delighted to hear the news that the Government will be extending the deadline until 30 June and only returning to the prior nil rate band at £125,000 in October. This gives borrowers a better chance of making the deadline and could retain borrowers who were going to pull out of the house purchase process.”

Paul Stockwell, chief commercial officer at Gatehouse Bank, added: “The Chancellor had to act to avert the fall-out to the property market which would have been caused by thousands of deals falling through due to not being able to complete in time.

“Yet moving the deadline to the end of June could simply create another cliff edge, particularly as it is likely the extension will entice even more people to the market this spring in the hope they can benefit from the discount.

“Anyone now about to embark on a home purchase above £250,000 should budget to pay stamp duty, despite these new deadlines, due to unprecedented demand creating a significant backlog of sales still in the system and completions taking much longer than usual.”