he Chancellor could extend the stamp duty holiday by six weeks to prevent tens of thousands of home buyers being caught in a “completion trap”, according to reports.
Rishi Sunak is considering a limited extension through to mid-May, which would help to alleviate fears that sales will fall through after the March 31 deadline expires.
The Daily Telegraph said he opposes calls for a longer six-month extension due to the “gratuitous” impact this would have on tax receipts, with the Exchequer desperate to recuperate revenues depleted by various tax breaks.
A source said: “It is certainly the case that a lot of people would be caught in the completion trap if the holiday were to end when it is due to.”
The move is likely to disappoint Tory MPs and campaigners who have been calling on Sunak to consider abolishing stamp duty altogether.
A Treasury spokesman told the Standard: “We do not comment on future tax policy outside of fiscal events.”
A debate is raging in Government between those in favour of hiking taxes early, and those who fear moving too fast may hamper recovery.
Asked if the Budget would involve tax rises, Sunak told Sky News: “I want to make sure that whenever the next shock hits the country that we can also respond in the same way.
“That will require our public finances to be put back in a strong and sustainable position.”
Figures released yesterday show last year the UK economy shrank at its fastest rate since the 1920s, with the Office for National Statistics recording a 9.9 per cent fall in GDP.
However, after 1.2 per cent growth in December, the economy looks set to avoid a double-dip recession.
Sunak is being urged to use next month’s Budget to scrap council tax and stamp duty and replace them with a single new property tax.
Last week campaigners, backed by some Conservative MPs, claimed 19 million households in England – 76 per cent – could be better off under a new proportional property tax.
According to the Fairer Share pressure group, 97 per cent of households in all the 44 so-called “red wall” seats in England which the Tories took from Labour at the last general election would benefit, with an average saving of £660 a year.
It said that setting the rate at 0.48 per cent of a property’s value based on current prices would bring in the same revenue as the council tax and stamp duty combined – with the tax to be apportioned between central and local government.
Overall, the group said households in England would be on average £435-a-year better off under the new system.
It acknowledged that basing the rate on current property prices – unlike the current council tax bands which are based on 1991 valuations – would mean households in London would pay more due to the “extreme” rises in house prices in the capital over the past 30 years.
However, it said that any increases should be limited to £100 a month until the property was sold.
Kevin Hollinrake, chairman of the Property Research Group of Tory MPs which campaigns for reform of the property tax system, welcomed the proposal.
He said: “The time is right to put fairness back at the heart of how we tax property. It would also boost transactions throughout the market, creating huge economic output at a time when we most need it.”
Aaron Bell, who took Newcastle-under-Lyme from Labour for the Tories at the 2019 election, said: “I believe it is time for the Treasury to be bold and consider a fundamental reform to our taxation of property, such as a proportional property tax.”
A Government spokesman said: “We have no plans to make such changes.
“We have analysed Labour’s plans for such an annual house price tax, which would mean soaring bills for hard-working families and pensioners who have saved and improved their homes. These proposals would have the same faults.”
