Chancellor Rishi Sunak is said to be preparing to introduce a three-month extension to the stamp duty land tax (SDLT) holiday.
According to The Times, Sunak is planning to extend the holiday to the end of June to prevent property sales from falling through as a result of the COVID-19 pandemic and will use the Budget next week to move the deadline.
Currently, the threshold for paying stamp duty on residential properties in England and Northern Ireland is set to fall back to £125,000 on 1 April 2021, from the temporary £500,000.
A recent study by the Centre for Policy Studies (CPS) reported that the tax break had prompted an increase in house sales to their highest level since the 2007 financial crisis.
The think tank reported the number of transactions increased from 132,090 in Q2 last year to 225,870 in Q3 and 316,300 by the end of Q4, with 87% of people buying a primary home having no SDLT to pay thanks to the holiday.
The CPS has called on the Government to either permanently raise the threshold, or abolish SDLT altogether.
Jethro Elsden, data analyst at the CPS, said:
"The introduction of the stamp duty holiday last July did not just rescue the housing market and construction sector, but proved conclusively that high stamp duty rates have become a damaging drag on the economy, the housing market and people's aspirations."
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