Stamp duty holiday 'to be extended to end of June', report suggests

24 February 2021, 01:03 | Updated: 24 February 2021, 05:37

The chancellor is reportedly planning to extend the stamp duty holiday by three months
The chancellor is reportedly planning to extend the stamp duty holiday by three months. Picture: PA
Nick Hardinges

By Nick Hardinges

Rishi Sunak is planning on extending the stamp duty holiday by three months to the end of June, according to a report in The Times.

The chancellor will use next week's Budget announcement to move the deadline to the end of June, the newspaper has claimed.

Last year, the Treasury temporarily raised the stamp duty threshold from £125,000 to £500,000 for property sales in England and Northern Ireland.

But with the end date edging closer, many prospective buyers have been left rushing to get their transactions over the line before 31 March for fear of being hit with a £15,000 tax bill.

Some have urged Mr Sunak to shift the deadline to later in the year, whereas Labour has branded the stamp duty extension as "another tax giveaway to second homeowners".

However, a Treasury spokesman said they could not speculate on tax ahead of fiscal events.

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A recent report by the right-leaning Centre for Policy Studies (CPS) said the tax break had seen house sales reach their highest level since before the 2007 financial crisis.

Data shows that after an initial decline in transactions between April and June 2020, the number of sales increased from 132,090 in the second quarter to 225,870 in the third quarter and 316,300 by the end of quarter four.

The think tank's research shows that stamp duty revenues rose by 27 per cent in Q3 compared to Q2 - from £1.1bn to £1.35bn - and suggests they will rise again in Q4 given the continued increase in transactions.

It is calling on the government to either permanently increase the threshold on primary residences to £500,000 - at a cost of £3 billion - or abolish it altogether.

Jethro Elsden, CPS data analyst and the report's author, said scrapping the holiday would be a "sledgehammer blow to the housing market".

Bridget Phillipson, Labour's shadow chief secretary to the Treasury, described the reported plans for a stamp duty extension as "another tax giveaway to second homeowners".

"These are the wrong priorities in the middle of the worst economic crisis of any major economy," she said.

"The chancellor should be taking action to protect family finances and secure our economy, not hitting them with tax rises while cutting them for landlords."

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