Stamp duty scrapped: Rishi Sunak could extend tax holiday permanently for house buyers
Chancellor Rishi Sunak is reportedly considering extending the current holiday and is facing calls to drop the property tax completely. He is being urged by homeowners, campaigners and more than 50 conservative MPs to extend the tax or get rid of it in favour of another tax. The property tax usually adds 3% to the price of homes worth under £500,000.
The steep tax rises to 15 per cent on homes worth over £1.5million.
SDLT was scrapped last summer in an attempt to boost the property market after it suffered during the first national lockdown.
The property market has surprisingly remained robust despite the global pandemic.
There will be a debate today in the Commons about stamp duty after more than 100,000 people signed a petition for the stamp duty holiday to be extended for a further six months after the March 31 deadline.
The petition, called “Extend the Stamp Duty Holiday for an additional 6 months after 31st March 2021” now has almost 110,000 signatures.
It’s been signed by people who fear the looming deadline could see their property transactions fall through and chains collapse.
houConveyancing, surveys and legal complications can take months to complete which could see some transactions struggle to meet the March 31 deadline.
There have also been calls for Mr Sunak to scrap council tax as well as stamp duty.
Tory MP Kevin Hollinrake is backing calls for property taxes to change.
He said: “These taxes are unfair, complicated and block aspiration.
“Unfair because the poorest find themselves hit hardest.
“Complicated because they are difficult to understand and command an intricate web of bureaucracy to administer.
“And they hinder aspiration by taxing property transactions and discouraging people from moving home.”
Some Tories have suggested the stamp duty holiday makes it difficult for families looking to buy bigger homes.
According to The Sunday Times, there could be a proportional property tax which would be based off the existing value of homes as an alternative to both SDLT and council tax.
Despite calls for the stamp duty holiday to be extended, some experts have claimed a deadline extension would not cure the housing market.
Nick Sanderson, CEO of Audley Group, said the holiday was put in place originally to “inject new life into the property market” at the beginning of the pandemic.
However, Mr Sanderson said it is “by no means a long term cure” for the housing market.
He added: “In the long term the Government does need to truly commit to solving the housing crisis and addressing some fundamental flaws.
“There is a chronic shortage of specialist housing for older people in the UK. It’s all well and good giving people a financial incentive to move, but if the properties aren’t available, the numbers won’t ever add up in the long term.
“We need to see the Government giving the green light to the development of more specialist retirement housing so older people looking to move can actually find properties which suit their current needs.”
One Twitter user said: “Apart from inheritance tax, stamp duty is the most immoral and illogical tax in existence.
“Paying out thousands of pounds you’ve already been taxed on. Needs to be scrapped ASAP.”
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