"There is clearly cross-party support for a holiday extension or tapered end given the concerning cliff-edge is now only two months away."
Opening the session, Conservative MP Elliot Colburn set out why he backs petitioners' calls for the Government to consider extending the stamp duty holiday, commenting: "42% of buyers say that they would be unlikely to continue with the purchase of a property at all if they were unable to take advantage of the stamp duty break... so the impact on the market could be substantial."
Some of the solutions proposesd by Colburn included extending the deadline to a new date, allowing transactions that begin before the 31st March to be eligible for the holiday, or maintaining the stamp duty threshold at £500,000 permanently.
Conservative MP Kevin Hollinrake agreed that extending the deadline for people who have a mortgage offer by the end of February for a further three months to allow completion "could be a sensible compromise that could alleviate some unfairness".
Labour MP Diane Abbott agreed that "special allowances should be made and grace periods should be made".
Conservative MP Greg Smith said that 200,000 movers are likely to miss the stamp duty deadline, going as far to call stamp duty "a tax on aspiration, a tax on the dream of homepwnersihp and a tax that disincentiviess moving in the property market".
Smith called for "a serious overhaul of this tax", citing studies showing that abolishing it altogether would increase transactions by a quarter. But in the short term, he said "too many people are already along the path to moving and are being caught out - it's essential the government steps in to make this holiday count for those movers already engaged in transations but for whom delays may push them past the 31st of March."
However, Responding for the Government, financial secretary to the Treasury Jesse Norman said that the holiday had fulfilled its purpose of stimulating the housing market, driven by the prospect of a March deadline. He said: "It was the time limited aspect of the [stamp duty holiday] which drove increased demand, which is exactly why the end date of March this year was announced."
As it stands, the stamp duty holiday will end as planned on March 31st. Any decision is expected to be announced during the Budget on March 3rd.
Mark Hayward, chief policy adviser at NAEA Propertymark, commented: “We welcome today’s important debate on the issue of the stamp duty holiday, and are pleased to see that there is clearly cross-party support for a holiday extension or tapered end given the concerning cliff-edge is now only two months away.
“The housing market boom, caused by the stamp duty holiday, has been hugely beneficial; however, the stamp duty cliff edge on the 31st March could cause thousands of sales to fall at the final hurdle and have a knock on and drastic effect on the housing market which has recovered well from the Covid slump.
“We are continuing to call on the Government to rethink these timings, so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”
Iain McKenzie, CEO of The Guild of Property Professionals, added: “There was much talk of the unnecessary cliff edge being presented by the end of March deadline in the debate but above all else stands the crowning unfairness that those who did act in good time will still lose out because conveyancing delays have ballooned to such extremes.
“That is hardly the fault of buyers. The minister was effectively saying that the strict time limit imposed on the scheme was by design, and it succeeded in its intended consequence which was to fire the starting gun on a very sudden and sharp increase in demand, producing positive ripple effects in the wider economy.
“However, in extreme circumstances like these, the Government should feel empowered to at least preserve the tax break for all those who have already entered into a transaction. Without these changes, the consequences for the market as buyers back out of purchases could be devastating, undoing all the economic halo effects they claimed to have been targeting.
“The reluctance to take action runs in the face of so much cross party dissent concerning the scheme’s obvious flaws. It’s clear there’s a lot of support among MPs on all sides to deal with this.”
