On the Wednesday in early July when Rishi Sunak announced a temporary increase from £125,000 to £500,000 in the stamp duty threshold for house purchases, a record 8.5 million people visited the Rightmove property website and I’m pretty sure I was one of them. I continued visiting it weekly: it became a lockdown obsession, alongside French television thrillers, until last month I finally spotted a London flat I wanted to buy. Now, like thousands of others, I’m pushing to complete before 31 March, when the stamp duty holiday — a £15,000 saving for me but the equivalent of a £3.9 billion annual giveaway for the Treasury — is due to expire.
The housing market has run hotter than anyone expected for the past six months and is still ticking along in lockdown, but pundits fear it will go cold again — with price falls of 5 per cent or more — when the stamp duty incentive is taken away. The Chancellor, under pressure to keep pumping cash on many fronts, also has to explain in his March budget how he plans to start rebalancing his books. There’s talk he might opt for the abolition of stamp duty (for which the Telegraph is vigorously campaigning) and council tax, and replace both with a new valuation-based property levy that sounds a lot like a first step towards a wealth tax.
But that’s surely too radical while he’s still in crisis-management mode, and meanwhile I’m hoping he has read a report from the CEBR think tank which argues that the £500,000 threshold is in fact close to fiscal neutrality (that is, the extra revenue from other taxes generated by higher house prices, a flurry of sales and related spending have more or less replaced the lost duty) but that a better result for the Treasury — possibly a ‘net annual fiscal gain of £546 million’ — would be achieved by reducing the threshold to £250,000.
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