SDLT holiday debate continues

A petition calling for a six month extension to the stamp duty holiday after March 31st has today achieved enough signatures for it to be considered for debate in Parliament.;

A petition calling for a six-month extension to the stamp duty holiday after March 31st has today achieved enough signatures for it to be considered for debate in Parliament.

The petition, started in late October by Jonathan Steel, a prospective buyer, can be found on the government’s website, here. As of 18th January, it has gathered over 110,000 signatures and has proved a popular concept with landlords and most involved in the property industry.

Once a petition reaches 100,000 signatures it must, by law, be considered for debate by the government. At the time of writing, this debate hasn’t yet taken place.

Mr Steel started the petition as he is expecting to move into a new build due to complete at the start of March 2021. However if the build encounters delays which take its completion date past 31st March stamp duty holiday deadline he will not be able to afford the duty and will therefore be unable to purchase the house.

The petition quickly reached 10,000 signatures last month, at which point the government were obliged to respond to the petition, which they did by 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.”

The governmental response continued:

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

The SDLT holiday has been successful in stimulating demand for property throughout the Covid-19 pandemic. In the government’s response to Mr Steel’s petition, they reported an 8% increase in transactions in October 2020, when compared to October 2019.

With property transactions falling by an estimated 50% during the first lockdown last year, many in the industry are understandably concerned about what might happen to demand, if the stamp duty holiday ends during the current lockdown restrictions.

Dominic Agace, chief executive of Winkworth, a UK estate agency pointed out that:

“No one envisaged a second and third lockdown when the stamp duty holiday initiative was launched. A one month extension to the end of April would help all of those currently progressing their sale.”

The restrictions on those in the UK have placed extra strain on key components of the moving process such as conveyancers, surveyors and lawyers. Resultantly buyers and sellers are encountering delays that threaten to extend their completion date past the stamp duty holiday deadline.

The prospect of scrapping stamp duty altogether has also been mentioned, with Conservative MP Kevin Hollinrake saying:

“These taxes are unfair, complicated and block aspiration.”

Tim Shipman, Sunday Times political editor, has claimed that changes to SDLT are still on the Chancellor’s agenda:

“Contrary to some reports [Sunak] is considering an extension to stamp duty cuts.”

Treasury minister Jesse Norman, who reports directly to the Rishi Sunak, has said that stamp duty acts as a barrier to families moving up to a bigger home or for older owners trading downwards to a smaller home and that its abolition would create a more flexible housing market.

The prospect of Parliament debating an extension to the stamp duty holiday will be very welcome to all involved in the property industry, who are hoping for a swift and positive response to this issue.

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