Petition
Parliament will on Monday debate the petition, signed by 130,000 people, calling for the Chancellor’s Stamp Duty holiday to be extended for a further 6 months beyond the current 31st March deadline.
The petition, whose signatories were unsurprisingly concentrated in southern and more conservative constituencies such as Mid Bedfordshire and Spelthorne, was created by a Mr Jonathan Steel. He was concerned that the new build house he was planning to move into at the beginning of March would suffer construction delays. According to his petition, should the delays put him on the wrong side of the tax holiday deadline, he would not be able to afford the additional tax and therefore his house.
Government Support
On 10 December HM Government responded stating “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.”
Whilst this would appear to put the prospects of an extension near zero, sources in government have given some indications to the contrary. Jesse Norman MP, a junior minister within the Exchequer, has asked civil servants to investigate the implications of scrapping SDLT (Stamp Duty Land Tax) in its entirety. This news - combined with recent reporting from the notoriously well connected Tim Shipman which suggests the Chancellor himself is considering the merits of an extension to the tax holiday - bodes well for anyone still waiting on local authorities, solicitors or builders to complete on their new home.
Given the success of the scheme, you can hardly blame the Chancellor and his colleagues for giving an extension serious thought. The COVID-19 pandemic and subsequent lockdown caused uncertainty for those buying and selling residential property and property transactions fell by as much as 50 percent during the first national lockdown. Since the relief was introduced, transactions have increased and seasonally adjusted data shows that in October 2020, transactions were 8% higher than October 2019.
A Replacement Tax?
In any case, the short term implications of Westminster politics seem good for prospective buyers. It remains to see what the future holds, however one thing remains true: so long as SDLT exists in its current form it serves to artificially inflate the cost of moving home, thereby reducing factor mobility and stifling the dynamic national economy. Politicians on both sides will have to consider if this is worth the £11.6Bn it brought in last year.
