This is due to the sheer volume of sales currently stuck in a market backlog, as the industry struggles to cope with the huge levels of market activity seen in recent months.
New research by estate agent comparison site, GetAgent.co.uk, has revealed the extent of the potential stamp duty bill for unexpecting homebuyers caught in the current market backlog.
The firm analysed the latest transaction data to see how this will impact the markets in England and Northern Ireland. The figures show that with England accounting for 97% of transactions, 315,534 sales could be impacted, while this drops to 9,466 in Northern Ireland. With a current average house price of £261,795 across England, the 315,534 homebuyers who find themselves in property transaction limbo would pay no stamp duty as a result of the current holiday; if they were to complete before next year’s March deadline, that is.
The same applies for the 3,030 homebuyers waiting to complete in Northern Ireland with property prices currently averaging at £143,205.
However, with these sales expected to fail to complete before the deadline, these homebuyers could be hit with a hefty stamp duty bill that they weren’t expecting.
With the average homebuyer in England usually paying £3,089 in stamp duty, this unexpected bill could come in at just under £975m. In Northern Ireland, this potential stamp duty bill is far lower but would still see homebuyers hit with an unexpected £3.446m.
In total, homebuyers could be slapped with a total stamp duty bill of £978,130,097 that they thought they had dodged having completed on their purchase months in advance of the stamp duty holiday deadline in March next year.
Colby Short, Founder and CEO of GetAgent.co.uk, commented: “Although the current stamp duty holiday has worked wonders in terms of reviving the property market, it has also presented its own problems for the industry.
"Such a heightened level of market activity has caused a huge backlog of sales waiting to complete and a large number of these transactions are predicted to miss next year’s stamp duty deadline altogether.
"As a result, many buyers could find themselves hit with an unexpected stamp duty bill having already stretched that little further during the offer process under the intention they would be saving this sum.
"It’s yet a further warning to those looking to buy to not overstretch themselves financially, whether it be with the expectation of paying no stamp duty, taking advantage of low-interest rates, or otherwise.”
