Growing Calls For Extension of SDLT Holiday
There are growing calls for the government to reconsider the way in which the current Stamp Duty Land Tax holiday will finish As it stands, the SDLT holiday will finish on 31st March 2020 and those who remember the last Stamp Duty holiday in 2009/10 recall the chaos in the run up to the deadline.
The initiative has already been criticised for its failure to backdate its introduction on the 8th July 2020 despite efforts from consumers and legal representation who felt they unfairly penalised for pushing ahead with transactions to keep the economy moving.
A petition launched in May has now achieved over 11,000 signatures. The government response indicated that there were “no plans to back-date this change to 1st March” adding;
“SDLT continues to be an important source of government revenue, raising several billion pounds each year to help pay for the essential services the government provides. All tax policy is kept under review and the views expressed to us are considered carefully as part of that process.”
There are now concerns that March 31st is a cliff edge over which many consumers will fall as transactions rush to meet the deadline.
Conveyancers have reported a significant surge in activity since the introduction of the SDLT holiday, much of which is coming to fruition in the coming months. Demand outstrips supply up and down the transaction with lenders, conveyancers and surveyors coming under pressure. Conveyancing vacancies on the online job site Indeed have more than doubled since the end of July.
It was reported over the weekend that 200,000 homemovers could miss out on stamp duty savings because of the backlogs in property transactions.
The industry is actively engaging with government over extending the deadline by 6-12 months.
“Pent-up demand from earlier in the year and the success of the Chancellor’s Stamp Duty ‘holiday’ have created an inflated market pipeline that will be squeezed from both ends – continuing volumes of new transactions are heading (more slowly) towards the cliff edge of customer expectations of beating the stamp duty deadline. We believe the extent of the squeeze is more severe than either 2009 or 2016 so we’ve been actively engaging with government over the last few months to highlight the issue and press for an extension of the Stamp Duty holiday by an additional 6-12 months”
Says Simplify’s Mark Montgomery, adding;
“The extension is needed to avoid serious difficulty in the market. It would help the pent-up demand to move smoothly through the system and would buy the industry and government time to manage the capacity and develop a different mechanic to smooth the end of an extended holiday period. Additionally, it would give further stimulus for the market at a time when it looks likely to be needed and help more of the current home purchasers to take advantage of the Stamp Duty holiday.”
An online petition has been launched asking for an extension in light of the spike in coronavirus cases. According to the author, Mr Oliver Jacobs, an extension would;
“… prevent “rushed” house viewings at a time where the infection rate is high, preventing further potential spread of the virus.
The extension would also help maintain the stimulus within the housing market during a period of continued turbulence, through economic downturn and widespread redundancy (or reduction in earnings).
Those requiring a move to downsize, to reduce outgoings, would also be more able to do so.”
And what about a more nuanced approach to the end of the SDLT holiday? One that ensures that active transactions are eligible but new transactions are not?
This week Today’s Conveyancer will be sharing the thoughts of the industry on the end of the SDLT holiday and calls for an extension.
To contribute please share your thoughts in the comments section below or contact us directly by email [email protected].