Rishi Sunak, Chancellor of the Exchequer and the man behind such headline-stealing initiatives as furlough and eat out to help out, is due to extend the stamp holiday deadline to the end of June.
According to a source who has spoken to The Times, when Sunak delivers his Budget next week, he will confirm a three-month extension to the holiday.
Pressure has been on the government to extend the holiday and speculation from onlookers as to what form such an extension would take has been endless.
It seems the government has opted for the most straightforward extension, no doubt hoping that the UK’s recent passion for property will continue through the summer and help prop up a very delicate economy.
It is expected the extension will cost the government an additional £1bn but failure to extend the holiday would, according to Rightmove, result in unexpected tax bills for around 100,000 people whose buying or selling journey has been delayed by slow conveyancing.
Postponing the inevitable?
There is little doubt that the stamp duty holiday has given life to a housing market that could otherwise have been struggling during the pandemic, but it’s also costing an awful lot of money, money which the government is having to borrow and will eventually have to pay back.
It will inevitably be taxpayers who end up paying for this holiday and the additional £1bn that a three-month extension will cost will now be added to this debt.
It’s clear that the government is concerned that the end of the stamp duty holiday will result in a property market slump, thousands of potential buyers disappearing overnight. This, however, is far from the most likely result.
First-time buyers make up a third of the market and they are largely exempt from stamp duty regardless of the holiday. Another third have clearly stated that their longing to move home has nothing to do, and will not be affected by, the SDLT holiday, or lack thereof.
As soon as Sunak formally announces the Budget next week, we’ll update you with what he says. But it’s seeming more and more likely that a full three-month extension is on the way.