Latest on Stamp Duty Holiday Extension

Reactions from the Housing Market and MPs following the Stamp Duty Holiday Extension Debate

A virtual 90 minute debate by MPs of the 'Extend the Stamp Duty Holiday for an additional 6 months after 31st March 2021" petition which was started at the end of October 2020, took place on Monday 1st February at 4.30 pm. This was after the online petition secured enough signatures (over 140,000 to date) to be considered by the government.

The Financial Secretary to the Treasury Jesse Norman MP, was responding for the government after calls were made to extend the current stamp duty holiday to prevent thousands of property sales from failing to meet the current deadline, leaving them in danger of falling through. Rightmove's latest statistics suggest that out of 613,000 transactions already in the sales agreed pipeline, as many as 100,000 could miss out on this tax break with a loss of savings of around £15,000.

Prior to the debate on Monday, the government and its MPs would not give any indication about whether there would indeed be an extension. A Treasury spokesperson said: “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.”

In spite of this, there were still numerous rumours abound with many believing that the scheme could be extended with amendments for those who have sold 'Subject to Contract'.

During the debate, Elliot Colburn MP, a member of the Petitions Committee, suggested a range of alternatives to the current scheme which included resetting the deadline to a new date, exploring the possibility of allowing transactions that begin before 31st March to be eligible for the scheme, and maintaining the Stamp Duty threshold at £500,000 permanently.

Jesse Norman MP, responded for the government saying that he "absolutely understands people's frustration regarding the forthcoming deadline on the stamp duty land tax holiday. But as honourable members well know, I cannot comment on tax policy outside a fiscal event."

Sarah Olney, Liberal Democrat MP for Richmond Park, offered an alternative view by expressing that to extend the scheme "just to avoid a cliff edge, would deprive the Treasury of much-needed funds at a time when there are many extremely pressing calls upon our public finances."

Sales Director of eConveyancer, Karen Rodrigues said “It’s unsurprising that the parliamentary stamp duty debate hasn’t resulted in an extension to the holiday today. Noise from HM Treasury in recent weeks has very much been that the end of March was a hard deadline. This focuses the mind for those who have transactions they want to complete ahead of that date and serves as a timely reminder about the importance of quality conveyancers who understand the importance of excellent customer service and how to use technology to deliver it.”

Chief Policy Adviser for Propertymark Mark Hayward, commented “We welcome today’s important debate on the issue of the stamp duty holiday and are pleased to see that there is clearly cross-party support for a holiday extension or tapered end given the concerning cliff-edge is now only two months away.

“The housing market boom, caused by the stamp duty holiday, has been hugely beneficial; however, the stamp duty cliff edge on the 31st March could cause thousands of sales to fall at the final hurdle and have a knock-on and drastic effect on the housing market which has recovered well from the Covid slump.

“We are continuing to call on the Government to rethink these timings, so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”

Iain McKenzie, CEO of The Guild of Property Professionals asserted “There was much talk of the unnecessary cliff edge being presented by the end of March deadline in the debate but above all else stands the crowning unfairness that those who did act in good time will still lose out because conveyancing delays have ballooned to such extremes.

“That is hardly the fault of buyers. The minister was effectively saying that the strict time limit imposed on the scheme was by design, and it succeeded in its intended consequence which was to fire the starting gun on a very sudden and sharp increase in demand, producing positive ripple effects in the wider economy.

“However, in extreme circumstances like these, the government should feel empowered to at least preserve the tax break for all those who have already entered into a transaction. Without these changes, the consequences for the market as buyers back out of purchases could be devastating, undoing all the economic halo effects they claimed to have been targeting.

“The reluctance to take action runs in the face of so much cross-party dissent concerning the scheme’s obvious flaws. It’s clear there’s a lot of support among MPs on all sides to deal with this.”

Despite the online petition and an increasing number of urgent calls for the government to amend the deadline so those who are already moving home can be guaranteed the stamp duty relief, nothing has changed to date and, as it stands, the scheme will end as planned on 31st March 2021. Which could result in extra pressure on the Chancellor Rishi Sunak, when he reveals the budget on 3rd March. Meaning that agents, homebuyers, conveyancing solicitors, mortgage lenders, surveyors, and indeed MPs will have an anxious wait until then.