Following a series of decisions made to help alleviate the disruption caused by the COVID-19 pandemic, there is now the potential for a stamp duty land tax (SDLT) holiday in a bid to boost the property market.
Measures such as the Bank of England cutting interest rates and mortgage payment holidays have already been put in place, as well as several business support measures, including the Coronavirus Business Interruption Loan Scheme (CBILS).
More than 1.2 million homeowners have taken advantage of the three-month mortgage payment holiday, including buy-to-let landlords, but experts are stressing that this means that homeowners will still owe the bank the same amount of capital, and they will continue to accrue interest.
With the current Government lockdown measures extended for another three weeks, at which point it will be reviewed and further extensions considered, there is the potential that further financial relief measures will be introduced, or current measures extended.
There is concern that house prices will be adversely affected by the crisis, with house price growth being a key consideration, with the reality that many individuals will have to financially recover from the impact that COVID-19 will have.
As a result, some experts are now calling for a SDLT holiday to encourage the property market. Industry bodies such as NFB and RICS have already voiced their support for a SDLT holiday, arguing that the removal of the tax for a fixed period would stimulate activity in the property market.
Liam Bailey, Global Head of Research at Knight, said: “Despite the fact the Government will forgo a significant amount of stamp duty revenue in 2020, it seems clear there will need to be a stamp duty holiday to get the market moving once the lockdown is lifted.
“But this move alone will not be enough – there will need to be moves across a wider number of areas including an extension to ‘Help to Buy’ to support first time buyers and support activity across all price bands.”
Robert Rosenberg, Partner at OGR Stock Denton, said: “There are several great ideas designed to stimulate growth afterwards. SDLT encourages buyers. A CGT holiday would also be necessary to encourage sellers, in my view.
“You need to encourage both sellers and buyers in any market and whilst homeowners would not be charged CGT, those with second homes could be persuaded to part with their asset if they knew they would not be charged CGT.”