Stamp Duty Holiday - Do The Right Thing Rishi!

There’s growing optimism that an extension to the stamp duty holiday - thought to be off the agenda just days ago - may now happen because of delays in property transactions during the new lockdown.

Firstly, a petition seeking an extension has now gathered over 40,000 signatures. You can sign it here. 

The government says in response that it “considers the views it receives very carefully” suggesting there’s still good reason for agents, suppliers and the industry at large to sign the petition.

Secondly, agents are renewing their calls for the extension in a bid to stop buyers being disappointed. 

“The new lockdown will have some impact on surveyors, removals firms etc and in the circumstances, it would be prudent for the Chancellor to reconsider the stamp duty deadline. Those who have moved heaven and earth to meet the deadline should not now be penalised if they miss it through no fault of their own” explains London agent Jeremy Leaf.

And George Franks, co-founder of London-based agency Radstock Property, comments: “Extending the deadline by at least another month to reflect the new national lockdown seems like the right thing to do in the current circumstances and I’m sure it’s on Rishi Sunak’s agenda. The property market is providing vital fuel for the economy and the Treasury will want to ensure that continues during the potentially challenging months ahead.”

Franks adds: “Extending the Stamp Duty holiday is a way for the Government to give people something to cheer about when there’s so little to cheer about, as public sentiment and the property market are closely related.”

Meanwhile Andrew Montlake, managing director at mortgage broker Coreco, says he wouldn’t be surprised if Sunak accepts there’s a need for an extension.

“Lenders, valuers and conveyancers are already experiencing bottlenecks and delays given the sheer amount of applications going through, and the administrative upheaval caused by the latest lockdown will only serve to accentuate them. We would not be surprised if the Treasury makes an announcement this week about extending the stamp duty deadline to keep demand alive and give the property industry some much needed wiggle room” suggests Montlake.

And David Hannah, founder and principal consultant of Cornerstone Tax - and a long-time campaigner for stamp duty reform - says: “The most preferable option would be a phasing out of the holiday, to avoid those who are currently in the process of purchasing their properties, essentially being thrown off a cliff-edge.

“Especially now that the country is being plunged back into another full lockdown, more must be done to help people get on the property ladder and give the market some security in what will be a very turbulent few months.”

In a response to the petition before Christmas, the government appeared on the one hand to rule out an extension but then admitted the issue was being kept under review - and that was before the current lockdown, set to last until late February at least. 

The government’s full response to the petition in December was as follows:

“The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The Government does not plan to extend this temporary relief.

“The COVID-19 pandemic and subsequent [spring] lockdown caused uncertainty for those buying and selling residential property and property transactions fell by as much as 50 per cent during the first national lockdown. 

“To stimulate immediate momentum in the property market and to support the jobs of people whose employment relied on custom from the property industry, the Government decided to introduce a temporary Stamp Duty Land Tax (SDLT) relief. This relief increased the starting threshold of residential SDLT from £125,000 to £500,000 from the 8 July 2020 until 31 March 2021. 

“Since the relief was introduced, transactions have increased and seasonally adjusted data shows that in October 2020, transactions were 8% higher than October 2019.

“As the relief was to provide an immediate stimulus to the property market, the Government does not plan to extend this relief. SDLT is an important source of government revenue, raising several billion pounds each year to help pay for the essential services the Government provides. 

“The Government is committed to supporting home ownership and helping people get on and move up the housing ladder. When the SDLT Holiday ends, the Government will maintain a SDLT relief for first time buyers which increases the starting threshold of residential SDLT to £300,000 for first-time buyers that purchase a property below £500,000. In addition, a new Help to Buy scheme will be introduced from 1 April 2021. This scheme will run until March 2023.

“All tax policy is kept under review and the Government considers the views it receives carefully as part of that process.”