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Extend stamp duty holiday for exchanged properties, say finance chiefs

The stamp duty holiday should be extended to include properties that have exchanged but have yet to complete, a leading accountancy firm suggests.

Hillier Hopkins says the holiday deadline of March 31 coincides with the end of the Help To Buy equity loan scheme, putting huge pressure on all elements of the house buying system.

Natasha Heron, tax manager at Hillier Hopkins, says: “The property market is facing a precipitous cliff edge with Help To Buy and the stamp duty holiday ending on March 31. This will have a devasting impact on the residential property market, with it likely to stall at a time when it should be at its busiest.

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“Stamp duty receipts contributed £11.6 billion to the government coffers in 2019/20 with the added advantage of it being a tax paid up-front rather than at the end of the tax year.

“We appreciate that the government needs to generate revenues now more so than ever, but the property market and the wider economy remains fragile. Support is still needed.

“The stamp duty holiday has created a degree of urgency in the market, with many home buyers and sellers struggling to get their deals across the line before the end of March. Local authority searches are taking longer as are mortgage approvals. A problem at any stage can lead to weeks of delay.

“As a result, we would expect to see in the coming weeks an increased number of deals that fall through. That is why we would urge the government to, as a minimum, extend the stamp duty holiday to those properties that have exchanged but yet to complete, or even better, extend the holiday through to September.”

Her comments come as another finance expert - David Hannah, principal consultant at Cornerstone Tax - renews his demand for the cliff edge to be avoided.

“Calls to make the holiday permanent or scrap the tax altogether seem unrealistic given the levels of public debt and the £12 billion tax take it generates each year, but having such a strict cut-off point, particularly in such a turbulent and difficult housing market and economic climate could result in a a catastrophic drop in demand and prices” he says.

“Raising to the nil-rate band, to somewhere around £300,000, will benefit the majority of buyers without affecting a large amount in tax revenues, which is obviously key to the recovery of public finances. These statistics demonstrate the importance of keeping the market moving to other sections of the economy and first-time buyers, those likely to spend less than £300,000, are the driving force behind this movement. 

“Home ownership is key to the UK economy, upward mobility and the aspirations of many that are currently struggling to get on the property ladder. Not only this but making it easier to move house without being penalised for doing so will make it easier to move to areas of growth and where jobs are.”

  • peter greenwood

    I think that Natasha has raised an excellent potential solution to the current end to the stamp duty holiday, by allowing properties that have exchanged contracts on or by the 31st March to remain eligible for the stamp duty holiday. This at least should be achievable by every buyer even if the standard deposit of 10% used on exchange of contract has to be reduced to, a deposit that can be reasonably afforded by the purchaser, in particular help to buy purchasers who only commit 5% towards the purchase. Of course this then rasies another issue as the current help to buy scheme these people are on also ends on the 31 March so a double blow if they cannot complete on time.
    Might be worth a petition on this issue being put to the Government Natasha.

  • Frances Spicer

    What is important to remember is that new builds have been badly affected by the 1st lockdown March 2020 when sites were closed, then delays in building materials deliveries, site workforce affected by workers having to isolate, or absences due to workers with Covid, plus longer land registry searches, (not to
    mention the atrocious weather!)
    Conveyancing & mortgage applications, with many of these staff working from home & less of them. I exchanged at the beginning of August 2020 for completion in December 2020 which has moved to January February March & now April due to the reasons above. I feel a fairer cut off date would be an exchange date set to a realistic date (say 3 months prior to 31/3/21 when it should have been reasonably expected a sale would go through to completion by.

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