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MPs call for phasing out of stamp duty holiday

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  • 02/02/2021
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MPs call for phasing out of stamp duty holiday
Members of Parliament have suggested a phasing out or tapering of the stamp duty holiday to avoid a cliff edge and allow those already in the middle of transactions to benefit from the policy.

 

A virtual debate was held by MPs yesterday, after a petition to extend the holiday by six months passed 100,000 signatures. 

Diane Abbott, Labour MP for Hackney North and Stoke Newington, said due to a cyber attack on the borough of Hackney on October 11, the council were unable to complete local land searches. 

She asked for special allowances for Hackney residents to allow them to enjoy the same financial advantage as the rest of the country because the council were only currently able to complete partial searches. 

Greg Smith, Conservative MP for Buckingham, said the holiday created a degree of urgency in the market meaning it was essential the government stepped in to “make the holiday count” for those who were already engaged in transactions and under pressure to complete 

Ben Everett, Conservative MP for Milton Keynes North, said a tapered and phased end would be useful to prevent a cliff edge caused by the combined removal of other pandemic-related support such as the furlough scheme. 

It was also suggested that an extension would go towards efforts to suppress the spread of Covid-19, as if estate agents and solicitors were not working towards a particular deadline, fewer employees would need to travel into offices to work. 

 

Reform not extension 

Sarah Olney, Liberal Democrat MP for Richmond Park and North Kingston, said she did not agree with an extension to the deadline. However, she admitted she thought the stamp duty tax in its current form was regressive and poorly designed as costs fall on buyers rather than sellers. 

She also questioned if the Treasury was “best advised to continue supporting house buyers or to use the money for other purposes” to support the economy. 

Abena Oppong-Asare, Labour MP for Erith and Thamesmead, said while her constituents would benefit from an extension, doing so would just create another cliff edge to a scheme which already had “fundamental flaws”. 

Jesse Norman (pictured), financial secretary to the Treasury, said: “The measure was designed to drive the recovery of the housing market in England and Northern Ireland. That is to stimulate immediate momentum in the property market.” 

He said it worked as a policy and noted that property transactions had increased since the announcement. 

“The aggregate effect helped to protect hundreds and thousands of jobs,” he added. 

Norman hinted that any changes to the tax break would potentially take place at the next Budget as he said he could not comment on tax policy outside of a fiscal event. 

He concluded: “The government will continue, as it always does, to listen carefully to representations from the industry and from those who are themselves planning to buy or sell a property.” 

 

Unsurprising result 

Karen Rodrigues, sales director of eConveyancer, said: “It’s unsurprising that the parliamentary stamp duty debate hasn’t resulted in an extension to the holiday today. Noise from HM Treasury in recent weeks has very much been that the end of March was a hard deadline.  

“This focuses the mind for those who have transactions they want to complete ahead of that date and serves as a timely reminder about the importance of quality conveyancers who understand the importance of excellent customer service and how to use technology to deliver it.” 

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