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Property industry asks for six-month stamp duty extension to meet demand

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  • 28/10/2020
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Property industry asks for six-month stamp duty extension to meet demand
Property firms and trade bodies have come together to ask the government to extend the stamp duty holiday by six months as the industry struggles to keep up with demand for homebuying and families risk missing out on a tax saving of up to £15,000.

 

In a letter to be sent to chancellor Rishi Sunak, trade bodies and firms representing the property industry have called for a smoother end to the stamp duty holiday to prevent a cliff edge halt to the incentive.

They want an extension of at least six months to be announced before Christmas.

In July, Sunak announced that the first £500,000 of the purchase of a main residence would be stamp duty free until 31 March. The exemption means buyers can save up to £15,000 in tax.

The group warned the government that the home buying and selling industry did not have sufficient capacity to deal with the surge in demand caused by the rush to complete transactions by the deadline.

The group wrote: “Movers will apply pressure to complete transactions by 31 March in order to benefit from the changes to Stamp Duty Land Tax (SDLT) and to meet the Help to Buy requirements.

“Failure to complete those transactions could see the breakdown of chains with consumers potentially financially unable to continue with the purchase, as they would have to find funds to pay stamp duty.”

 

Twenty weeks to complete

Disruption caused by Covid-19, which included the rule to work from home if possible, has driven up average property transaction times from 12 to 20 weeks putting home movers at risk from missing the stamp duty deadline, the group said.

It added: “By acting now, the government can release the pressure in the system to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.

“Any extension or gradual phasing of the SDLT would also help mitigate sharp reductions in consumer demand.

“More widely, a buoyant housing market drives consumer confidence in the wider economy whereas constrictions on lending and falling house prices lead to reduced consumer confidence and a material reduction in economic activity.”

The group said it was ready to work with the government to avert these risks.

 

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