Will Rishi Sunak extend the stamp duty holiday?
Reports suggest that the chancellor is considering a six-week addition to the tax break
Property buyers and sellers will be hoping that reports of an extension to the stamp duty holiday turn out to be true as they race to complete transactions.
Currently the deadline for the end of the tax break is 31 March, but according to The Telegraph the Chancellor of the Exchequer Rishi Sunak is considering a six-week extension to mid-May in order to prevent tens of thousands of home buyers being caught in a “completion trap”.
The stamp duty holiday was introduced in July last year in a bid to “help kickstart the economy which had been hugely impacted by the coronavirus pandemic”, says the Daily Express.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
As part of a £30bn economic aid package, the stamp duty threshold was increased from £125,000 to £500,000 on residential properties sold in England and Northern Ireland between 8 July 2020 and 31 March 2021.
£1bn in savings - if deadline is extended
If the holiday is extended by six weeks, between 120,000 and 160,000 additional property transactions in England could benefit from the tax saving, says Rightmove. And if 160,000 transactions made it through buyers could save £1bn.
According to the property website, 412,000 sales agreed last year are still in the legal process. Of those, about 100,000 are expected to lose out if the deadline stays as 31 March.
Rightmove’s property expert Tim Bannister said: “We know the stamp duty holiday was intended as a temporary stimulus for the market, but the delays we’ve seen in the home-moving process have been through no fault of the buyers and sellers who agreed a sale last year and who are now desperately trying to get their deals over the line.
“The delays have been a result of the huge number trying to go through, along with the many challenges of the people involved in the process working from home. If there was a six-week extension it should give the majority of the sales from last year the chance to complete in time.”
‘Prolongs the agony’
If the tax snaps back on 31 March, as many as 100,000 deals may collapse, says the Daily Mail, which could “trigger a drop in house prices”. Sales worth £1.5bn are at risk and estimates suggest “one in five property deals” will fall through as a result.
Describing the stamp duty situation as “mayhem”, Estate Agent Today’s Graham Norwood says agents and conveyancers are “expressing doubt over whether a possible six-week extension to the stamp duty holiday will be enough to stop fall throughs”.
Rob Hailstone, founder and managing director of the Bold Legal Group, said: “It makes no sense to just extend the SDLT [stamp duty land tax] holiday. Another batch of would-be purchasers will simply miss the next deadline. Surely, the government either has to be creative or leave well alone at this late stage?
“It is like saying - good news Mr Hailstone your lethal execution date has been put off six weeks. Still going to happen, still going to be just as scary and just as final. Just prolongs the agony.”
Create an account with the same email registered to your subscription to unlock access.
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Mike Starling is the digital features editor at The Week, where he writes content and edits the Arts & Life and Sport website sections and the Food & Drink and Travel newsletters. He started his career in 2001 in Gloucestershire as a sports reporter and sub-editor and has held various roles as a writer and editor at news, travel and B2B publications. He has spoken at a number of sports business conferences and also worked as a consultant creating sports travel content for tourism boards. International experience includes spells living and working in Dubai, UAE; Brisbane, Australia; and Beirut, Lebanon.
-
Today's political cartoons - March 16, 2024
Cartoons Saturday's cartoons - pointed commentary, Haiti in trouble, and more
By The Week US Published
-
5 hilarious cartoons about the RNC's MAGA takeover
Cartoons Artists take on RNC funding, Lara Trump, and more
By The Week US Published
-
Trump's presidential run: a bad bet for Republicans?
Talking Point The GOP is taking a 'big gamble' on former president's 2024 White House bid
By The Week UK Published
-
New austerity: can public services take any more cuts?
Today's Big Question Some government departments already 'in last chance saloon', say unions, as Conservative tax-cutting plans 'hang in the balance'
By The Week UK Published
-
Has life in Russia regressed since the Ukraine invasion?
Today's big question The 'war economy' has defied Western sanctions as ordinary citizens rally round the regime
By Elliott Goat, The Week UK Published
-
Can DEI survive an anti-woke backlash?
Today's Big Question Activists take aim at corporate diversity programs
By Joel Mathis, The Week US Published
-
How did America avoid a recession in 2023?
Today's Big Question A downturn was inevitable. Until it wasn't.
By Joel Mathis, The Week US Published
-
Will the UK economy bounce back in 2024?
Today's Big Question Fears of recession follow warning that the West is 'sleepwalking into economic catastrophe'
By Chas Newkey-Burden, The Week UK Published
-
2023: the year of sticker shock
The Explainer Many Americans were down on the economy this year due to problematic prices
By Justin Klawans, The Week US Published
-
What does a slowdown in payroll additions mean for the coming year?
Today's Big Question New private payrolls were well below expectations this November, according to one report
By Justin Klawans, The Week US Published
-
Would tax cuts benefit the UK economy?
Today's Big Question More money in people's pockets may help the Tories politically, but could harm efforts to keep inflation falling
By The Week UK Published