Harrogate stamp duty burden
Home buyers in Harrogate paid tens of millions of pounds in stamp duty last year, as the property industry calls for an extension of the current holiday on tax.
In a letter to the Chancellor, leading property organisations warned housing transactions across the country could fall of a “cliff edge”, and that the industry does not have capacity to deal with the current surge in demand.
New figures from HM Revenue and Customs show home buyers in Harrogate paid around £30 million in Stamp Duty Land Tax in the year to March, with a further £10 million from non-residential properties.
This was from 3,900 transactions for properties worth a combined £1.5 billion.
Across England, residential and non-residential properties worth £406 billion changed hands last year, contributing £12 billion in stamp duty.
Typically, every home buyer must pay Stamp Duty Land Tax on all properties over £125,000, or £300,000 for first-time buyers.
But in July, the Treasury announced a temporary stamp duty holiday to encourage people to buy houses in the midst of the coronavirus pandemic.
This applies for all sales of £500,000 or under until April 2021, and the Government said it said would save buyers an average of £4,500 each.
Although there are still months to go before the deadline, the system is already under pressure.
Zoopla said that around 140,000 more people are waiting to complete sales than this time last year, warning those who leave it to January to start their search might struggle to complete a sale in time.
Professionals are urging the Government to act swiftly.
Groups including the National Association of Estate Agents Propertymark, the Guild of Property Professionals, the Residential Property Surveyors Association and conveyancers Bold Legal Group, sent a letter to Chancellor Rishi Sunak calling for “urgent action”.
They want the Government to extend the stamp duty holiday by at least six months and make an announcement before Christmas.
They also want it to work with the industry to develop a method to help smooth the end of an extended stamp duty holiday “to prevent another cliff edge”.
The letter says failure to complete transactions by March 31 “could see the breakdown of chains with consumers potentially financially unable to continue with the purchase, as they would have to find funds to pay stamp duty”.
Mark Hayward, chief executive of NAEA Propertymark, said: “The boom caused by the stamp duty holiday has been hugely beneficial for the housing market, however the stamp duty cliff edge on March 31 could cause thousands of sales to fall at the final hurdle and have a knock-on and drastic effect on the housing market, which has recovered well from the Covid slump.
“We are calling on Government to rethink these timings so pressure on the system can be released to allow transactions to complete and avoid a disorderly and distressing period for movers and businesses throughout the market.”
An HM Treasury spokesman said the Government keeps Stamp Duty Land Tax under review and is closely monitoring the market.
He added: “The temporary stamp duty cut is helping to protect hundreds of thousands of jobs which rely on the property market by stimulating economic activity.
“Its time limited nature is what has encouraged people to take advantage of the scheme.”