No extension to SDLT holiday says Treasury
The Treasury has announced that there will be no extension to the Stamp Duty Land Tax (SDLT) holiday, with the deadline looming for 31 March 2021.
Petitions began to be created imploring the government to extend this break for many, as backlogs will prevent people from completing their transactions before the deadline. One petition was signed by more than 22,000 people, hitting the threshold of 10,000 and prompting a government response.
The Treasury said the stamp duty 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.”
Adding that the pandemic caused uncertainty for buyers and sellers with property transactions down by as much as 50% during the first lockdown.
The Treasury went on to say:
“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 Treasury confirmed it will maintain the stamp duty relief for first-time buyers which increases the starting threshold of residential SDLT to £300,000 for property purchases below £500,000.
The writing was seemingly on the wall when, The Guild of Property Professionals encouraged their members to send a letter to their MP asking for an extension to the SDLT holiday. Many members have received a response, but aren’t over awed.
Members have cited many arguments in letters to their MP’s detailing the impact various backlogs in the housing transaction pipeline are having on property professionals and the public.
Part of the standardised response from MPs read:
“I understand concerns regarding the backlog of transactions and the impacts this could have on people whose purchases may complete after 31 March and I will alert my ministerial colleagues to the strength of feeling on this matter.”
Iain McKenzie, Chief Executive of The Guild of Property Professionals, said:
“Many of the responses have been a standardised reply that shows support for extending the tax break, but no further details regarding what we could expect leading up to the 31 March 2021.”
Ian McKenzie continues:
“We are … aware that at this stage the government has not agreed to extend the tax break and have not laid out any plans with to regard to a phased out approach. For the time being, the deadline remains, and many transactions will not make the cut off. We will continue to encourage our members and the industry collectively to have their say and send their letters to their local MPs.”
And he adds:
“An extension of the stamp duty holiday would be optimal, however, if the government decides against an extension, at the very least a phasing out period would help lessen the blow to people currently in the process of buying a home.”