SDLT debate takes place online

On the 1st of January, the House of Commons came together to conduct their first streamed debate. The topic, whether there should be an additional 6 months extension to the current Stamp Duty Land Tax (SDLT) holiday which is due to end on the 31st of March. ;
Government

On the 1st of February, the House of Commons came together to conduct their first streamed debate.

The topic, whether there should be an additional 6 months extension to the current Stamp Duty Land Tax (SDLT) holiday which is due to end on the 31st of March.

Long road to debate

This debate has been brought about by a petition which has garnered over 140,000 signatures at the time of writing, 40,000 more than the required threshold for the debate to be held.

With the Coronavirus infection rates reaching new highs, it appeared as though the debate would not take place. As of the 14th of January, all debates in Westminster Hall were suspended.

Chair of the Petitions Committee, Labour MP Catherine McKinnel called for the government to restart these petition debates last week.

Those against

During the 65-minute online session, MPs from across the house took their turn to defend the extension petition and the benefits that the extension could bring to the British economy.

Only one MP, Sarah Olney of the Liberal Democrat party was in opposition of this extension.

She referred to the extension as a “massive tax break for the wealthy”. Olney also described SDLT as a whole as “poorly designed and regressive” and suggested that the money that would be used for the holiday extension would be “best used for other purposes” such as furlough schemes or to support high street businesses.

Labour and Conservatives unite

The remainder of the 10 MP’s who were included within the debate were in firm support of the extension.

Some, such as Elliot Colburn MP, suggested that a “phased and tapered winding down” would be needed to ensure there was not as much dismay and shock in a sudden cut off on the 31st of March.

Barbara Keely MP highlighted that the addition of a January lockdown had come as a surprise and that homebuyers should not be penalised for having made a commitment with the expectation they would be able to not pay for stamp duty in their transaction.

Government response

Jesse Norman MP, Financial Secretary to the Treasury, responded on behalf of the Government.

He started out by stating that he was “aware of the strength of feeling on this issue” and “fully understand the frustrations” of those who are in the process of purchasing a property.

Following this he discussed ‘revisiting the rationale for the SDLT holiday’:

“The government’s view was, that when the country came out of lockdown, it should do what it could to give people the confidence to buy and sell their homes and it was for that reason, at the Summer Economic Update in July, that the Chancellor introduced what became known as a Stamp Duty Land Tax holiday.”

Mr Norman emphasised why the SDLT holiday was introduced:

“It is important to say that the measure was designed to drive the recovery of the housing market in England and Northern Ireland. That is to stimulate immediate momentum in the property market and thereby to help to protect businesses and jobs in the sector, by keeping house sales moving."

In discussing this reasoning, he referenced that Scotland and Wales had not extended their respective schemes:

“The Welsh and the Scottish governments followed suit, although I note that both decided not to extend the scheme.”

The sentiment shared was very much that the desired outcome intended by the government was positive and had done its job:

“What is clear is that, as a policy, it worked. The holiday is not the only aspect of the market that has driven sales, but it undoubtedly helped to incentivise people to move home.”

Norman went on to strongly emphasise that the government saw a key part of the success of the initiative as being its time-bound nature:

“Importantly and I would draw the committee’s attention to this, it was the time limited aspect of the measure which drove that increase in demand, which is exactly why the end date of March this year was announced when the policy itself was first introduced.”

Critically, in his closing remarks the Financial Secretary observed that no change would come about before the Budget:

“As honourable members know, I cannot comment on tax policy outside a fiscal event.”

The public and landlord community will have to wait until the 3rd of March to find out whether there will be any changes.

Andrew Turner, chief executive at Commercial Trust commented:

“The tone of the government’s response to this debate, to me, says we are unlikely to see an extension of the SDLT holiday.

“Given the sentiment around the success achieved, I would be surprised to see any change in policy being announced by the Chancellor come 3rd March.”

The debate in full

You can click below to watch the full debate around the E-Petition.

This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.