Stamp duty debate a black hole
05 Feb 2021
At the moment I would describe the ongoing industry debate around an extension or tapering of the stamp duty holiday deadline as akin to a black hole, absorbing everything in its orbit.
The fact is that it’s understandable why so much effort is being put into lobbying the Government on this, but the longer we are left wondering whether any dispensation will be given, the edgier we (and our purchase clients) will get about whether they are going to complete by the 31st March and secure the saving.
These of course are unprecedented times and I have no doubt that the government would not have envisaged the country in its current pre-deadline lockdown putting even further pressure on all those stakeholders who are working on those transactions.
However, as the recent Parliamentary debate revealed, there is still no definitive answer on whether any kind of extension or taper will be offered, and that leaves all stakeholders with a mixture of both hope and fear.
I don’t expect any definitive answer either until next month’s Budget but, in my mind, there’s no doubting that an early decision – either way – would be beneficial to all. It would alleviate some of the stress and pressure, or it would signal that the line drawn in the sand is genuinely the end point, and perhaps allow those involved to make early decisions.
It remains likely that, unless there is a tapering/extension, a significant number of transactions won’t make that deadline. What that means in terms of aborted transactions remains to be seen – will those purchasers who may be just days/weeks away from completing pull out altogether if the stamp duty saving isn’t available to them, or will they carry on regardless and find the extra money?
Who can say at this time, although there are plenty of bodies/commentators suggesting that large numbers will abort. If that is going to be the case, then a tapering (rather than an extension) does seem fair.
It was made pretty clear in Parliamentary debate that this holiday was always meant to be time limited in scope, and a tapering could be deemed part of that definition.
I’m slightly amazed that some trade bodies and individuals are still calling for a six to 12-month extensions. That type of request is for the birds, and to an extent looks naive, greedy and suggests that the industry can’t handle its own workload, even if these are difficult times in terms of resource.
I therefore think a tapering sends out a good message, and to a large extent will keep large numbers of individuals ‘on board‘ when it comes to housing market engagement. Imagine if your first interaction with agents/advisers/lenders, etc, ended up in abject disappointment because your purchase couldn’t be completed before a deadline which would ultimately save you money. How might this impact your future engagement? Would you wish to interact again with those involved?
Far better to have a short period of grace now to allow those already well through the process to complete beyond the end of March and secure the saving, rather than putting off a vast number of individuals who might never trust the system again.
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