Stamp duty holiday could be extended by six weeks
The Chancellor is considering extending the stamp duty holiday until May, a report in The Telegraph said this week.
According to the unnamed source Rishi Sunak is keener for a shorter extension of around six weeks rather than the six months requested in the high-profile petition on the subject.
The source is then quoted as saying: “It is certainly the case that a lot of people would be caught in the completion trap if the holiday were to end when it is due to.”
The stamp duty relief raised the minimum threshold for paying the tax from £125,000 to £500,000, while it is currently set to expire on March 31st.
The government’s perspective
The government is looking to cut costs and increase its income owing to the escalating cost of the pandemic.
With policies like the furlough scheme to maintain, UK government borrowing hit £34.1bn in 2020, the highest December level on record.
Some expect Chancellor Rishi Sunak to make an announcement on stamp duty when delivering his Spring Budget on 3rd March 2021.
The subject of an extension has been debated by MPs, and most seemed to support some kind of extension, even if it’s just for people currently in the process of buying a house.
There’s been a variety of responses to rumours of a stamp duty holiday extension.
Alex Beavis, head of mortgage products at lender Skipton Building Society, called for an announcement to be made on stamp duty before the Spring Budget, so everyone knows where they stand.
Conveyancer O’Neill Patient responded with caution, stating that it’s safer for buyers to assume the original deadline will stand, for fears of being disappointed by having to pay normal tax rates.
Meanwhile Nick Sanderson, chief executive of Audley Group, warned that the housing market would struggle to withstand the shock of an immediate cancellation to the stamp duty relief.
Given that the government often leaks information to The Telegraph – it’s nicknamed The Torygraph for a reason – you can’t rule out the source being accurate.
Considering the number of MPs who support some kind of stamp duty extension, it seems likely we will see one in some form.
However Lenders and surveyors are currently struggling to cope with business levels, with social distancing measures in place, so the last thing they want is for more buyers to rush to the market.
With this in mind, the Chancellor could be waiting for the Budget to make an announcement, so as not to encourage new buyers to enter the system now in hope of taking advantage of the stamp duty holiday.