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Stamp Duty Holiday Deadline Sparks Warning Over Scammers

Stamp duty holiday
(Image credit: Getty Images)

Home buyers looking to benefit from the stamp duty holiday have been warned about fraudsters targeting the tax break as the March deadline looms. 

The stamp duty holiday, introduced in July 2020, has fuelled a boom in house prices as home buyers look to make the most of the tax break, which exempts the first £500,000 of all property sales from stamp duty.  

But the upcoming deadline of 31 March 2020 - the government has confirmed there will be no stamp duty holiday extension - means home buyers are scrambling to make the most of the tax break, and scammers are looking to take advantage.

UK Finance, which represents financial firms, says that fraudsters have targeted large sums of money, including deposits, with homeowners at risk of being manipulated into paying money into the wrong account by fraudsters.

It has observed instances of criminals pretending to be estate agents and asking for personal details, claiming that the person moving home is due a “refund”. 

UK Finance also warns that home buyers are at risk from identity theft, in which letters sent to old addresses are used by criminals to apply for credit or benefits in their name.

How to Avoid Stamp Duty Holiday Scams

Home buyers should be alert to emails purporting to contain new payment details from firms they are already dealing with, or duplicate invoices for services. Moreover, it is important to check payment details with agents or solicitors by phone before transferring money.

To avoid identity theft, UK Finance says householders should ensure they notify banks, building societies and other organisations of a change of address, and set up a redirection service for any other post.

Katy Worobec, managing director of economic crime at UK Finance, said: “Moving house can be a stressful time; however, it’s vital to remember to take steps which could keep you safe from scams.

“This includes letting your bank and other organisations know that you’ve changed address, making sure your mail is secure, and ensuring the recipient’s bank details are correct when paying large amounts of money during the house buying process, such as your deposit.”

Stamp Duty Holiday Set to End

The stamp duty holiday delivered a shot in the arm to the housing market in 2020, following months of lockdown which essentially led to a housing market freeze. It inspired a boom in house prices, and with only months until the deadline to benefit, it’s not surprising that industry experts and home buyers are anxious for it to be extended. 

The holiday was also praised for its impact on those considering renovating a house, and those in the midst of buying or considering a move in the coming months, who can reinvest the savings into their project. In September, Checkatrade estimated that 33% of homeowners planned to direct the savings into their new home by making home improvements or renovations.

But the clamour has put the housing sector under pressure. Nearly a third of prospective home buyers have been refused a mortgage since the stamp duty holiday announcement, Market Financial Solutions (MFS) revealed in September, with mortgage lenders opting for caution following a turbulent 2020. 

(MORE: Experts’ advice on getting a mortgage)

Moreover, around 325,000 home buyers could miss out on the stamp duty holiday even if they agreed to purchase homes before the end 2020.