The industry must be prepared for the stamp duty holiday being extended during the Budget according to Peter Izard, business development manager at Investec.
The industry must be prepared for the stamp duty holiday being extended during the Budget according to Peter Izard (pictured), business development manager at Investec.
Following the results of an online petition last year calling for the stamp duty holiday to be extended, the government responded stating that it “does not plan to extend the relief” beyond the 31 March deadline this year.
However, there have since been rumours detailing the expectation that the Chancellor will extend the deadline by an additional three months.
Izard said that the industry must be prepared for this outcome becoming a possibility.
According to Rightmove, it is estimated that there are approximately 100,000 property transactions underway which would be at risk of falling off a “cliff edge” if the deadline is not extended.
Izard believes that while an extension to the holiday would be welcomed by many in this respect, it may simply delay this issue to further down the line if not managed correctly.
He said: “The stamp duty holiday has certainly achieved what it set out to do - reviving demand for purchasing property, and spurring the economy during the pandemic - however, if another cliff-edge deadline is instated the Chancellor will need to plan ahead to avoid a similar situation in June.
“Many have argued that a tapered approach to the deadline - winding down the relief in the weeks leading up to, and after the deadline - could be a better approach to avoid future issues.”
Looking to the impact on the prime property market, Izard outlines that an extension will have limited impact.
He added: “Lower down the market, however, an extension would see significant tax savings made by home buyers who would be able to take advantage of the holiday.”
Data from Rightmove also shows that if the stamp duty holiday were to be extended until the end of June, an additional 300,000 sales in England will benefit from the holiday.
This equates to buyers collectively saving £1.75bn in tax, with 80% paying no stamp duty.
Izard said: “These are significant numbers, and while an extension could certainly help to further instil confidence in the market, the Chancellor will still need to assess what the stamp duty will look like beyond the holiday’s life cycle.”