Economist's view: Why we welcome the proposed Stamp Duty extension
Commenting on the news the Government is considering extending the Stamp Duty Land Tax relief window, Nitesh Patel, Strategic Economist at Yorkshire Building Society, said:
We called for the Government last year to put in place a Stamp Duty freeze taper to ensure home buyers weren’t caught out with an unexpected bill, so we welcome the news the Government is considering extending the Stamp Duty holiday beyond March 31.
Bringing the policy to dead halt on March 31 is likely to cause issues for potential buyers, who have agreed a sale and have a mortgage in place, but won’t have time to complete before the deadline. These buyers could potentially be facing an unexpected tax bill of up to £15,000.
The policy has contributed to a housing market which has remained extremely buoyant in an economic downturn, with mortgage approvals for home movers last year outperforming those in 2019, and 2020 recording the highest UK house price growth since 2014.
However, we would urge the Government to reconsider at a taper of the tax relief – a period of grace which would allow any property sales which have been agreed and have secured a mortgage approval given a set period of time to complete their transaction with stamp duty reduction benefit. If the policy is merely extended, we may well face the same situation of home buyers who are caught out when the extension comes to an end.