UK Chancellor Under Pressure to Extend the Stamp Duty Holiday Beyond March 2021

"Rishi Sunak Covid-19 Press Conference 29/05" by UK Prime Minister is licensed under CC BY-NC-ND 2.0

There’s been much in the news about the Stamp Duty Holiday enjoyed by home seekers in the UK throughout 2020 and the support it’s providing to a buoyant housing market. This support is due to end on March 31st 2021 when the holiday ends and there is increasing pressure to extend it further in the face of Tier 4 changes.

Affecting London and large parts of South East England, Tier 4 restrictions are seen as a threat to housing sales, despite a recent statement saying that the mechanisms of the UK housing market would be able to continue as normal under the new rules.

Prevention Is Better Than a Cure

Estate agents, solicitors and surveyors across the country have been lobbying the chancellor, Rishi Sunak, to extend the stamp duty for a further 6 months to help maintain what is a strong housing market. This included the sending of a letter to the government, citing the fact that the boost to the economy it would provide, would benefit everyone and far outweigh the lost stamp duty revenue.

At this stage, the official word is that Mr. Sunak doesn’t plan to extend the current stamp duty holiday, but this stance could change if Tier 4 changes have a significant impact on house sales. Although the estate agency isn’t being shut down like everyone else, the restrictions could still indirectly slow things down.

The Treasury Has a Track Record for U-Turns

Anyone worrying that the holiday won’t be extended should look to the fact that the treasury and the government has something of a track record for making drastic U-turns. Not too long ago, the Prime Minister was telling us that it wouldn’t impose restrictions on people over Christmas and then what happens? Implementation of Tier 4 from Boxing Day.

Further evidence can be found in the fact that the furlough rules (also a temporary supporting measure) have changed several times themselves. So, logically, you’d have to wonder why the government would risk the housing market coming to a juddering halt when so much has been invested in other parts of the economy.

"Houses, £1 sterling coins and a HMRC Stamp Duty Land Tax form" by Patrick Cannon Tax Barrister is licensed under CC BY 2.0

An Extension Would Actually Make Money for The Treasury

Aside from being a measure that would boost the housing market, an extension to the stamp duty holiday would actually net the treasury more than it would lose in revenue.  According to a recent study, the treasury would lose around £3.9bn in stamp duty, but would recoup more than £4.1bn in taxes generated by extra house sales - and that’s just the effect it would have in the housing sector!

What this shows is what we all essentially know - the stamp duty holiday is a beacon of light that has shone through during what has been a difficult year. By extending the deadline, it would seem that the government could very much get the best of both worlds.

Here’s to a Prosperous 2021 for the Housing Market!

 As things stand, March 31st is still a big day in 2021 for home buyers to keep an eye on, but as we’ve seen, that could change as time progresses. Whichever way it’s sliced, the government understands the value of a buoyant housing market, so it wouldn’t be surprising at all to see it extended.

At FS Properties, we have several property developments located across London, so what we’ve spoken about here impacts us as much as anyone. We keep a close eye on the latest housing market news so that we can keep our readers as informed as they can be when making those big house purchase decisions.

If you want to know more about us, check out our website www.fsproperties.co.uk where you’ll find everything you need to know. Alternatively, should you need to get in touch, we’re available to talk to on 020 8771 3787. 

That’s it from us in 2020. We hope you all had an amazing Christmas and we’ll see you on the other side in a brand new and hopefully prosperous New Year!