Sunak raised the threshold for stamp duty land tax (SDLT) in England and Northern Ireland from £125,000 to £500,000, with immediate effect for the next nine months. The tax holiday is expected to cost the Treasury about £3.8bn.
Lee Pickett, real estate partner at DWF, said the tax cut was ‘a nice boost for the housing market which is often considered the bedrock of the wider UK property market.
‘Those not yet committed to a house purchase may be encouraged to follow through rather than withdraw (in many cases collapsing a chain of several transactions). Where new build sales were incentivised by SDLT contributions, those costs which were effectively considered price reductions by mortgage lenders are now being met by the public purse which should give a boost to house builders and help stabilise or even improve values and house prices.’
Dr Thomas Quirke, managing director of conveyancing search company SearchFlow, said: ‘The most important aspect of the announcement today is the timing; any delay in bringing the SDLT holiday into play could have had a catastrophic effect on the market, as people would wait for the tax break to commence. I commend the Chancellor for taking instant action.
‘Those already on the property ladder who may be considering their next move are set to make big savings if the deal is completed before 31 March 2021, while freeing up more property for those entering the market. For example, someone purchasing a property at around £480,000 is set to save over £14,000 in taxation during the SDLT holiday, while the average stamp duty bill is set to fall by £4,500.’
Law Society president Simon Davis said the stimulus would ‘be welcome news for solicitors whose volume of work has fallen’.
The Chancellor’s economic statement also offered employers a one-off £1,000 payment for every furloughed employee retained to the end of January 2021. He launched a ‘kickstart scheme’ to encourage employers to hire trainees and young workers, including £2,000 for every apprentice under 25 years old (£1,500 if older than 25 years) for six months from 1 August.
Davis said: ‘We will be encouraging law firms as well as in-house teams to make use of this programme to train 16 to 24-year-olds by boosting the number of apprenticeships in the law.’
However, Davis called on Sunak to ‘go further’, suggesting he could help create additional jobs in legal services by providing funding for lawtech seats and training in lawtech skills, training in secondary specialisations, training contracts for students about to complete the Legal Practice Course, and joint roles so firms can deliver pro bono work in partnership with legal charities.
The economic statement also included a six-month VAT cut from 20% to 5% for restaurants, hotels and entertainment, energy efficiency grants for householders, an August discount on restaurant meals, and £50m for energy efficiency measures in social housing.
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