Stamp duty holiday extension: MPs call for later end date to avoid collapse in home sales
Prospective home buyers hoping for an extension to the stamp duty holiday were left on tenterhooks after today’s parliamentary debate over the temporary tax break.
The debate was held in response to a 139,000-signature petition and amid evidence that the scheme gave a significant boost to the housing market in the wake of the first wave of coronavirus.
The stamp duty holiday was announced by Chancellor Rishi Sunak in July 2020 as part of a raft of measures to support the UK economy following the first national lockdown.
The promise of up to £15,000 off buyers’ tax bill if they complete before March 31 this year triggered a surge in home sales and has pushed London house prices up by almost 10 per cent in the past year.
Some property industry figures have called for stamp duty to be scrapped altogether in an attempt to keep momentum in the market.
Others have called for an extension of the holiday deadline to avoid a ‘cliff edge’ of home sales that have failed to complete before the deadline from falling through.
MPs across parties spoke on behalf of constituents who would not be able to afford their prospective home or complete their purchase if they missed the deadline. They supported calls for a tapering off the stamp duty holiday end date for buyers where transactions were already in process.
Elliot Colburn, Conservative MP for Carshalton and Wallington, cited research from Paragon which found two thirds of their customers in the mortgage pipeline had budgeted for the tax break, or else had a buyer somewhere in their chain who was dependent on their sale completing before the stamp duty holiday deadline.
Labour’s Catherine West was one of several voices who noted the wider economic benefits of a buoyant housing market and the stress and inconvenience to her constituents in Hornsey and Wood Green who were hoping to complete before the deadline.
However, she insisted any prolongation of the holiday should be targeted, quoting Welsh Labour’s figure that second home buyers had benefitted from £1.3 billion in tax cuts during the stamp duty holiday period.
The estimated cost to the Treasury of the stamp duty holiday is £3.8 billion, money both Sarah Olney, Lib Dem MP for Richmond Park and Ben Everitt, Tory MP for Milton Keynes North, agreed could be better spent elsewhere.
It remains unclear whether or not a decision to extend the stamp duty holiday will be announced before the Budget in March. However, the Treasury said in December that there were no plans to extend the relief.