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.
“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.”