“It’s essential the government steps in” – MPs have their say on the stamp duty holiday

2 February 2021 | General

Both Labour and Conservative MPs have backed calls to eliminate the cliff-edge deadline to the stamp duty holiday.

While some MPs called for an outright extension to the holiday, most suggested that allowances should be made for those with ongoing transactions.

Yesterday there was a 70-minute debate in a virtual House of Commons on the issue, following an e-petition calling for a six-month extension to the stamp duty holiday, which has amassed around 140,000 signatures.

Labour MP Barbara Keeley said: “I’m calling on the government to act to ensure that people who have made a commitment to buy a house in the reasonable expectation that they wouldn’t have to pay stamp duty are not hit with an excess charge.

“There are options. It need not be an open-ended extension to the duty holiday, but could retrospective, to allow anyone who has already had an offer accepted to be exempt from stamp duty, even if they are unable to complete by March 31st.”

She spoke about how nobody could have seen the lockdowns and restrictions coming when the stamp duty holiday was first announced, making it unfair for people to potentially miss out on this tax break.

Greg Smith, Conservative MP, said: “It’s essential the government steps in to make this holiday count for those movers already engaged in transactions, but for whom delays may push them past the 31st March.”

Smith also attacked stamp duty as a whole, saying it disincentivises housing transactions and caps people’s homebuying aspiration. He therefore called for an overhaul.

Meanwhile Conservative MP Elliot Colburn said: “If a permanent change to stamp duty isn’t on the Treasury’s outlook, especially during the time of the pandemic, then I would argue that a phased and tapered winding down of the relief would probably be the most preferable option.”

It’s likely the strategy on how to end the stamp duty holiday will be announced with the Budget on March 3rd 2021.

Sarah Olney MP of the Liberal Democrats seemed most hostile towards the stamp duty holiday and potentially extending the tax break, though she agreed that the Treasury should “make allowances” to ongoing transactions.

Abena Oppong-Asare, Labour MP, also a swipe at the holiday as a short-termism policy, while she raised concerns that an extension could cause another cliff edge.

Read their arguments in more detail here.

Other MPs generally called for a slow wind down of the policy.

Kevin Hollinrake MP suggested that people should be given an extension who have received a mortgage offer by the end of February.

And like other Conservative MPs, he called for wider reform to property taxes. He felt stamp duty should be abolished and replaced by a new proportional property tax.

Janet Daby, Labour MP, appeared to support an outright extension to the holiday.

She said: “Just as we’ve seen the extension of the job retention scheme, the emphasis on working from home and other public health measures continue beyond March, so to should be the stamp duty relief.

“The extension of the stamp duty relief would benefit all of us, regardless of whether we ourselves are wanting to buy property or move home. But we all need the economy to move again and where it is moving, we need this to continue.”

Meanwhile Labour MP Dianne Abbott argued the holiday should be extended locally in Hackney, because a cyber-attack has led to huge delays in council services in the area, meaning the council hasn’t been able to provide land search information to mortgage lenders.

She said: “The residents of Hackney should be allowed to enjoy the same benefits as others have through the stamp duty holiday.”

This post has originally been featured in Property Wire.