Is a stamp duty holiday likely?

tallac

I'm in the process of buying a property and I read a few different articles about how some UK organisations are encouraging the UK Government to initiate a stamp duty holiday (one such article is this: https://www.estateagenttoday.co.uk/breaking-news/2020/5/stamp-duty-holiday--zoopla-shows-how-it-could-help-the-housing-market).

As far as I can tell, there is nothing officially announced or released that would indicate this was in the head wind. The only decent information that I read was that a stamp duty holiday was initiated in the 1992 recession and again in the 2009 housing collapse.

Thoughts and opinions on whether a stamp duty holiday is likely or not?

Does anyone know what the stamp duty holiday rule changes were for back in 1992 and 2009?

Thanks in advance

Brock_and_Roll

I would say there is more chance of Boris Johnson being elected pope!
Obviously as a result of the huge Government spending, the overall tax burden is going to have to rise significantly over the next few years, so unless there is a total collapse in the number of housing sales (and by extension the government's tax revenue), I would imagine a SD cut is very unlikely indeed.

numbercruncher8

Most things are politics.

A stamp duty holiday is not progressive: it would not benefit first time buyers (virtually all are under the limit apart from more expensive parts), and is a low cost for movers (again, most transactions in the country).

Higher value properties and those in more expensive areas would stand to benefit more as the stamp duty rate gets more and more expensive. Thus the benefit of this tax break would see little difference to the average person, but quite a substantial one to richer people.

Can't imagine that going down well. In fact once the whole virus thing has gone, further wealth taxes based on land/property seem a more equitable way to tax the population. 

blue_max_3

I'd also suggest the property market is still moving. Unless it grinds to a halt, there is probably little reason to try to influence the market at this time. Shame as I'm ready to buy too.

Freecall

Brock_and_Roll said:

I would say there is more chance of Boris Johnson being elected pope!

A reasonable chance then.

Of course, as in previous campaigns, he we need the right slogan to demonise an opposition group of some kind. 

'Burn the Heretics' might work.

  

fishfingerbutties

At the moment there is some buoyancy in the market, so SD receipts will be most welcome currently. I can see it becoming an option once things cool down to try and keep some momentum, but not just yet.

Thrugelmir

Doesn't appear to be any justification for one at the current time. Property market doesn't require a lift. 

numbercruncher8

Really, just how beneficial would it be anyway. 

There are something like 1,000,000 property transactions a year and 350,000 first-time buyers. 
The average house price is £230,000 and the average stamp duty cost on that is around £2,000. That kind of figure is hardly going to induce people that don't want to, to take the plunge. 

On current figures the move would be expensive, but most of the benefits would be heavily skewed towards those buying more expensive properties.

Tax cuts are not entirely benevolent, like the government would like to think. If the government sought to cut VAT for instance it would hope that the cost would be more than offset by increased consumption of goods, which in the end increases the tax take.

Now, would that really be the case here? It would be my guess that it wouldn't, and any savings on tax would inflate the price of the property instead. 

Between the government and the banks there have been enough props for the property market put in over the last decade. Adding more and more just gives rise to a situation where it will be difficult to remove them without it all falling over.

blue_max_3

numbercruncher8 said:

Higher value properties and those in more expensive areas would stand to benefit more as the stamp duty rate gets more and more expensive. Thus the benefit of this tax break would see little difference to the average person, but quite a substantial one to richer people.

Can't imagine that going down well. In fact once the whole virus thing has gone, further wealth taxes based on land/property seem a more equitable way to tax the population. 

Having to pay £400-500k for a one bed flat does not make a person rich. Quite the reverse.

tallac

Brock_and_Roll said:

I would say there is more chance of Boris Johnson being elected pope!
Obviously as a result of the huge Government spending, the overall tax burden is going to have to rise significantly over the next few years, so unless there is a total collapse in the number of housing sales (and by extension the government's tax revenue), I would imagine a SD cut is very unlikely indeed.

So.....Pope BoJo?

foxy-stoat

Yes very likely !