With pressure growing on Chancellor Rishi Sunak over the last few weeks to extend the stamp Duty Holiday beyond the 31st March, from home buyers and sellers and the property industry itself, any hopes for this matter to be publically debated in parliament appear now to have been completely dashed. Does this mean there is now no hope left for seeing the Chancellor grant an extension?
As Leader of the House in Parliament, Jacob Rees-Mogg has suspended sittings in Westminster Hall where the parliamentary Petitions Committee on petitions debates, ‘until further notice’. The Stamp Duty e-petition has been signed by 113,000 people, exceeding the 100,000 threshold needed to oblige the government to have the petition debated in Parliament.
It has been presented as being a matter of Covid health and safety as to why the committee is to no longer meet. However, with the Chair of the Petitions Committee’s requests for the debates to continue virtually falling on deaf ears, there are now allegedly some suggestions that there may be some skulduggery afoot, focused on burying the petition between now and the 31st March when the stamp duty holiday ends. Who knows what the real story is?
So extension or no extension?
It could be suggested that this latest news reinforces the view that there will be no extension. As previously reported, a spokesperson for HM Treasury said: “The SDLT holiday was designed to be a temporary relief to stimulate market activity and support jobs that rely on the property market. The government does not plan to extend this temporary relief.”
The chancellor has a severe economic crisis on his hands and he needs cash! SDLT receipts in 2019/2020 where £11.6 billion pounds. He may now consider that can no longer afford the free giveaway and has calculated that whilst the property market might drop back post-March, he will still achieve enhanced revenues from full rate SLDT, and low-interest rates and underlying strong demand will drag the housing market through any lull in activity in the relatively short term.
However, he could choose to extend. The property market has been one of the few very positive driving forces in our struggling economy. Amid concerns that thousands of buyers could fail to complete before the deadline and a fear that the housing market will not fare well in the strong winds of economic misfortune that may soon bear down on us all, he could well decide he does not want to take the risk of killing the goose that lays the golden egg. Even a short extension until May/June, could help to keep demand alive and give the property industry some much-needed wiggle room.
There has also been some talk in the press he may take this time as an opportunity to carry out a root and branch reform of SLDT, or even abolish it and introduce a new system of property taxes, as a part of a package of recessionary tax measures designed to boost government revenues and constrain debt.
Whilst many are proffering simple black and white theories as to why he will or he won’t, they may well find they have ignored what the reality of the Stamp Duty holiday extension dilemma may really be. And that is at the moment, with the complexity of the economic crisis he is having to handle, the Chancellor may not know himself as yet, as to what the right course of action should be. To extend or not to extend, that is the question he may well still be wrestling with for some weeks to come.
The Robert Bell & Company Team.