It would not come as a surprise if the government were to extend stamp duty reliefs in the upcoming Budget, according to some tax experts.
In a recent blog post, RSM associate directors, Michaela Seager and Bethany Barker, said with more data published recently which implied the UK housing market has slowed, they would expect some news on stamp duty in the upcoming Budget.
“We would not be surprised if the government announces extensions to the existing stamp duty land tax reliefs in the spring budget”, they argued.
They explained stamp duty changes in the Budget could include an extension to the thresholds at which SDLT is paid; a reduction in the rate of SDLT; or a temporary SDLT holiday - depending on how aggressive the government feels it needs to be.
This approach, alongside offering a revised help-to-buy scheme, may be a popular move for the current government with the general public.
However, Seager and Barker cautioned this is a “tried and tested” method that has already been used by previous governments to successfully influence the UK housing market.
Explaining the demand for such measures, Seager and Barker pointed out that the latest statistics published by the Office for National Statistics and government suggested the UK housing market has stagnated.
These statistics included house prices decreasing by 1.2 per cent in the year to the end of October 2023 and the number of UK residential transactions that completed in November being 22 per cent lower than the previous year.
These all indicated there is “hesitancy” in the housing market.
Solution
As a solution to this hesitancy, Seager and Barker pointed out SDLT is one measure that has been historically used to influence demand for housing in the UK.
They explained that, since SDLT replaced stamp duty on land transfers in 2003, SDLT policies have been changed approximately 15 times.
“In periods where the economy has been struggling governments have introduced or increased reliefs to stimulate demand,” they stated.
However, they cautioned that, with a general election expected this year, any change could be short-lived if a new government were elected.
Although different governments will want to implement different policies, Seager and Barker said they anticipate SDLT reliefs will be a “key tool” used by all parties to encourage investment into the housing market.
tom.dunstan@ft.com
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