Do we need a stamp duty holiday to ignite the housing market?
PUBLISHED: 13:11 09 June 2020 | UPDATED: 13:11 09 June 2020
Estate agents are divided over whether the government should give house buyers a break in paying a “tax on aspiration”.
Some property industry bosses are calling for a break from paying the dreaded stamp duty, particularly after house prices fell by 1.7pc last week – the worst drop since February 2009. This wiped £4,000 from the average value of homes compared to April.
Stamp duty, paid by buyers on homes for sale for more than £125,000, rakes in around £12 billion a year for the government.
Jamie Minors, owner of Minors & Brady, with offices in Caister, Dereham and Wroxham, said: “My colleagues/peers may hammer me for saying this, but it isn’t needed. We saw 28 new home valuations last Friday and sold 14 properties. The property market in Norfolk is phenomenally active. Enquiry levels are up, Rightmove statistics are up and sales are being closed for great prices. Why accelerate a market which is already gaining momentum?”
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Ben Rivett, associate director at Savills in Norwich, agreed. “A stamp duty holiday has historically been introduced to stimulate a flat or falling market – neither of which we have at present. We are in a period of high demand, it seems, with a relative lack of stock due to the lockdown preventing the usual levels of houses coming to the market for this time of the year.
“The Treasury will need to protect its tax revenue given the considerable increase in public spending, so we don’t anticipate a stamp duty holiday at this stage.”
But Nick Taylor, former chairman of the Norwich & District Association of Estate Agents (NDAEA), and owner of Hadley Taylor in Norwich, called for it to be scrapped permanently.
“Stamp duty is nothing more than a tax on aspiration,” he said.
“It is the main reason why the British are moving house less frequently than they used to. Every house move involves the purchase of an enormous range of products and services and the VAT on each of these transactions would more than cover any reduction to the Treasury in stamp duty.”
Jan Hytch, partner at Arnolds Keys, with offices across Norfolk, and chairwoman of the NDAEA, added: “A stamp duty break would certainly stimulate the housing market...a SDLT reduction window later in the year for purchasers at £500,000 or less could encourage people to continue with their plans to move beyond the normal seasonal window.”
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