The Stamp Duty Land Tax (Reduction) Bill 2022-23 has been introduced and given its first and second readings in the House of Commons.
The reduction of SDLT for certain acquisitions of residential property in England and Northern Ireland, by increasing the threshold below which no SDLT is paid and increasing the thresholds for first-time buyer’s relief was announced at the recent mini-Budget and took effect from 23 September 2022.
MPs voted 288 to 152, a majority of 136, to give the Stamp Duty Land Tax (Reduction) Bill a second reading.
However, some questioned whether the Bill would survive Rishi Sunak’s coronation as Tory leader, with Labour and the Lib Dems suggesting a U-turn may await the legislation in the near future.
The Bill is one of the few measures which survived the Liz Truss’s disastrous mini-budget following the economic turmoil it caused, alongside the repeal of the national insurance rise.
These cuts to stamp duty will mean that an estimated 43% of transactions each year will pay absolutely no stamp duty whatsoever.
It would increase the threshold for not paying stamp duty from properties worth £125,000 to those worth £250,000.
Treasury minister Felicity Buchan told the Commons the Bill will also expand on the “generosity” of the stamp duty holiday during the Covid-19 pandemic “to ensure that those purchasing their first home pay no stamp duty on purchases up to £425,000”.
She added: “The maximum purchase value for which first-time buyers can claim the relief has also been increased from £500,000 to £625,000.
“These cuts to stamp duty will mean that an estimated 43% of transactions each year will pay absolutely no stamp duty whatsoever. That’s up from 25% before the provisions of this Bill.
“No one purchasing a second home or investing in a buy to let property will be taken out of paying stamp duty as the 3% surcharge on the purchase of additional dwellings will continue to apply.”
Buchan told MPs that the Bill would “will allow more people to buy and to move each year”, adding: “This will also mean more business for painters, decorators, moving companies, plumbers, electricians and all of the industries reliant on a healthy housing market.”
Shadow Treasury minister James Murray criticised the government for delaying the remaining stages of the Bill, which were due to be considered this week.
He said: “This last-minute flip flop of parliamentary business sends a message that it is open to the new prime minister and whoever his chancellor might be to change their mind over the stamp duty changes.
“By delaying the Bill’s remaining stages, the government has introduced yet more uncertainty into the housing market which frankly is the last thing anyone needs.”
Murray added: “At a time when our economy is reeling from the long-term damage the Conservatives have done, when current and future homebuyers are facing spiralling and prohibitive mortgage costs, and when we are still flying in the dark as the Tories have refused to publish the OBR forecasts, it is not the time to spend £1.7bn a year on this tax cut.”
Liberal Democrat MP Tim Farron told the Commons: “It is very hard to support a proposal which is the sole, straggling survivor of a disastrous mini-budget and one suspects the only reason it has survived is because the people who are hurt by it are people who live in communities the Government think they can take for granted. Well they can’t, and they mustn’t be allowed to do so.”
The former Lid Dem leader added: “I do not understand why the government is clinging on to this proposal which will do such little good even for those people it will help, and such amount of harm to those it will do harm to, when it has the chance to think again.
“I would urge them very strongly that they should do just that.”
SOURCE: Property Industry Eye | OCTOBER 26, 2022 | MARC DA SILVA
Estate Agents
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