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Stamp Duty Holiday : Debate Update

 

Stamp Duty Holiday - Debate Update

 

In a 70 minute debate in a ‘virtual’ House of Commons this afternoon, we heard both Labour and Conservative MPs express an unanimous desire for the stamp duty holiday to be extended. However, Treasury minister Jesse Norman MP, remained tight-lipped about any changes.

Norman said he would be unable to make further comment or any changes due to the political convention of the government not making formal announcements outside of the Budget – which is next due in March.

The session was chaired by Catherine McKinnell MP (Labour) and was started by a member of the Petitions committee, Elliott Colburn MP (Conservative). He commented that this petition was unusually controversial and hadn’t seen so much correspondence on any e-Petition issue in his time on the House of Commons Petitions Committee.

Colburn said that there had been “something of a boom” thanks to stamp duty extension and that instead of creating a “cliff edge” on March 31st that a phased and tapered winding down should be considered to avoid any overnight shocks.

Catherine West MP (Labour) was next to speak and claimed she had received dozens of emails from her constituents saying they were worried their purchases wouldn’t complete in time and then fall through.

Kevin Hollinrake MP (Conservative) agreed with Colburn’s earlier comment of a cliff edge and suggested that buyers/sellers who have reached a certain stage in their purchase/sale should be allowed a further holiday, providing sufficient time for the sale to complete.

Hollinrake also commented that he felt a full holiday extension shouldn’t be granted as it would it would be counter productive and just create another cliff edge.

Dianne Abbott MP (Labour) specifically called for an extension to the holiday due to the “disaster” cyber attack in her constituency that led to huge delays in council services, delaying hundreds of sales for no fault of buyers or sellers.

Abbott requested that buyers in her constituency Hackney, should be given their own specific stamp duty extension and this would cause no fiscal consequences to the Government.

Greg Smith MP (Conservative) said that he had also received a “large postbag” as well as calls and emails about the issue. He is concerned that the cliff edge that the property market is currently facing could have “a devasting impact”.

Janet Day MP (Labour) said that buyers should not be put into further financial difficulties because they have to pay stamp duty costs because of the pandemic causing delays. Day suggested that that the stamp duty tax relief should join other financial measures which have been extended by the Government as the property market is “a key indicator of the country’s financial success.”

Matthew Offord MP (Conservative) said that a further extension until the end of 2021 would boost transactions by 10%. He also said that he had spoken to a lot of his constituents and that a number of them “will not be able to go ahead with their property purchases if they can’t complete by 31st March.”

Barbara Keeley MP (Labour) said the issue is of vital importance to tens of thousands of people across the country. She told MPs that “no one could have foreseen the multiple lockdown and restrictions that happened after the stamp duty holiday was first announced” and that many would be out of pocket because of legal expenses already paid.

Sarah Olney MP (Lib Dem) was the only MP against the idea of an extension and said she had been “against the stamp duty holiday when it was announced and am still against it now”. She said that the holiday was a regressive and poorly designed scheme and that the money could be better spent on more deserving causes, such as funding furlough, benefits or town centres businesses.

Ben Everitt MP (Conservative) said it’s a complicated issue with “a lot of cold hard cash” for the Treasury riding on the decision. He agrees with Colburn’s earlier ideas of tapering the end rather than creating a cliff edge.

Everitt also called for a reform of the Stamp Duty Land Tax as a whole saying we need an exit strategy from this “dangerous” tax that is “a brake on social mobility”.

Abena Oppong-Asare (Labour) reminded everyone that Labour criticised the government when this policy was first announced for allowing a large proportion of this support to go to second home and investor purchasers. She also said that the extension seems to be another example of the Chancellor’s short term stop-start approach to the Coronavirus crisis.

Jesse Norman (MP) ended the session by thanking all public for signing the e-petition and highlighting the importance of this issue. Whilst he acknowledged everyone’s comments, Norman said that he wouldn’t be able to make any comment on tax policy outside a fiscal event.

What he did say is that the holiday was created to reignite the property market after the first lockdown in spring last year and it has therefore worked extremely well – with transactions up 34% year on year.

He further commented that this spark was fuelled by it being a time-limited offer. Norman also commented that both Scotland and Wales have decided not to extend the stamp duty holiday.

 

 

 

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