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CML wants stamp duty holiday extended

The Council of Mortgage Lenders has called on the Government to extend the stamp duty holiday beyond March 24 in this month’s Budget.

Chancellor George Osborne is set to give his Budget statement on March 21. In November’s autumn statement, he said there will be no extension to the stamp duty holiday as he does not feel it has been effective.

Since March 2010, first-time buyers buying a home worth up to £250,000 have not had to pay stamp duty.

When the holiday comes to an end later this month, borrowers will go back to paying no tax on purchases up to £125,000. Borrowers with purchases of between £125,000 and £250,000 will pay 1 per cent of the price. This rises to 3 per cent for purchases between £250,000 and £500,000, 4 per cent between £500,000 and £1m and by 5 per cent for £1m or more.

In its fortnightly newsletter, published last week, the CML warned against removing the concession and called for the Government to reform the “slab” structure of stamp duty, saying that it “distorts housing market decisions and impedes labour mobility”. It says: “At a time of economic fragility, the loss of the stamp duty concession risks having a disproportionate negative effect on household sentiment, which we believe would be best to avoid. Longer term, more fundamental flaws that persist in the structure of stamp duty need to be addressed.”

The CML also called on the Government to introduce fiscal measures to improve and optimise the use of the UK’s existing housing stock and called for measures to promote institutional investment in mortgage assets to boost the number of private rental properties.

London & Country associate director of communications David Hollingworth says: “Stamp duty reform is on everyone’s wish list but I cannot really see it happening any time soon.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. I fully support this call for the extension of the holiday. As a FTB myself, l am likely to JUST miss it owing to the ardous process of buying a home in this country.
    It is wrong for Mr Osbourne to say it has not been effective. He needs to recognise that having had just 2 years with the concession in place, many FTB’s were busy trying to raise the heavy deposits required, and now having achieved that, we now have to deal with the stamp duty. It feels somewhat counterproductive. Someone needs to tell him that.

    Also, why give a deadline that is not even on a working day? Does that mean therefore that in fact we lose that extra day or will it extend to the next working day?
    In any event, he needs to re-think about extending it further, based on what we saw happen in January with the increase in mortgage applications.

  2. I couldn’t have said this better myself. I am in the exact same situation, have been saving for years and now have to find another £1800 which isn’t as easy as it sounds. If anybody from the government wants to see this country back begin to move again then extend the stamp duty and stop taking so much tax of us all.

  3. As FTB, my husband and i have saved like mad for the deposit. We were due to complete beginning of April but have now had to rush the builders into finishing prior to the exemption ending. fingers crossed we Will complete last minute on the 23rd march but we are still at risk of this not happening and having to find another £1700. Its ridiculous and even more crazy that it ends on a Saturday when solicitors dont work Saturday!

  4. Thanks Jordan. I wonder how many of us are actually in this position and if there are enough of us, it would not be worth it to petition the government to extend it, even if by a month or 2 because honestly, this extra cost, for which I’m not even sure what the purpose is, and why therefore it has to be so high, is just a burden.

    I just feel ill at the prospect of having to pay it (and mine is 1580)…and i have already been told that it is unlikely that i will complete in time after all. All indications so far are that it has definitely worked in getting mortgage applications moving, and if most of them are from January, it is highly unlikely that people would have completed on time.

    Can we do this?

  5. As a potential first time buyer, I have saved a great deal towards my deposit. Now I am finally in a position to buy, it is wholly disheartening to realise that due to the stamp duty I’m not sure that I can lose a potential £1600 from my deposit and still secure the property.

    In other to boost house sales and encourage First Time Buyers, the government must thoroughly reconsider this matter. Offering 5% deposits and affordable housing was not desirable in my case. Low deposits resulted in a highly charge as the best mortgage rates were based on the lowest loan in value. In addition, the affordable housing in my region is often in deprived areas. Neither options to me seem feasibly. I’m confident that I speak for the masses when I say that the stamp duty holiday for first time buyers encourages those who are, or will be, financially suitable to boost the nation’s economy.

  6. i wish he would extend the dead line even 6 months is fine. i am also missing it due to sellers not being able to meet it. i don’t have the extra to fund for this stamp duty now. No furniture when moving, but I have to allocate for this tax. We are helping getting on the ladder so why not encourage this positive act, and look at other areas where he can get more tax

  7. I expected to have my house purchase completed by 24 March 2012. This is unlikely to happen without finding an extra £1900.00 to pay for stamp duty. This is not going to happen and therefore I will be unable to purchase the property and having already incurred costs in trying to purchase the property in the first place, this seems to be totally unfair.

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