Stamp Duty holiday to drive post COVID economic growth
Speaking in a debate last night, I welcomed the Chancellor's decision to introduce a temporary cut to Stamp Duty Land Tax, (SDLT), believing that this measure will make a significant contribution in driving much needed growth in our post-COVID economy.
If you purchase a residential property between 8 July 2020 to 31 March 2021, you only start to pay SDLT on the amount that you pay for the property above £500,000. These rates apply whether you are buying your first home or have owned property before.
The 3% higher rate for purchases of additional dwellings applies on top of revised standard rates above for the period 8 July 2020 to 31 March 2021.
Companies as well as individuals buying residential property worth less than £500,000 will also benefit from these changes, as will companies that buy residential property of any value where they meet the relief conditions from the corporate 15% SDLT charge.
How this affects Penistone and Stocksbridge
The value of the average residential property sale in the constituency of Penistone and Stocksbridge in September 2019 was £171 000, so this measure will mean the vast majority of local house buyers will pay no SDLT. Set alongside the evidence that confidence in the housing market is closely linked to consumer confidence and consumer confidence is an essential part of driving economic recovery - this measure is key to getting local businesses working again. Estimates suggest that just moving house helps boost the economy through additional spending worth around 5% of the value of the house purchase.
With hundreds of thousands of jobs linked to housebuilding - estate agents and removal firms to builders, decorators, plumbers, electricians and gardeners - I am confident that taking action to support the housing market will not only protect local jobs but will also create them, - so measures like this must be welcomed.
As well as a short-term measure to restart the housing market, there is strong consensus across the country that to fix our housing market in the longer term we must build more homes. I am pleased, therefore, that the Government intend to bring in reforms of our planning system that will enable more houses to be built more quickly. That is particularly necessary in cities like Sheffield, where the local authority still has no local plan, or even a draft local plan, which means there is no evidence-based understanding of or consensus on where and what types of housing should be built. That puts greenfield sites in danger when brownfield sites are still available.
Whilst the temporary relief on stamp duty will give our housing market a boost - it remains the case that Sheffield needs a local plan to ensure we prioritise development on our brownfield sites.