The report also discusses the risks and rewards which devolution can bring, as well as considering some of the fiscal tools and approaches that can help manage those risks.
Propertymark understands and acknowledges some significant challenges to devolving powers in Northern Ireland which were highlighted by one-to-one discussions and a survey of our members. In common with other respondents, they expressed concerns about the status of the Assembly and the ability to administrate devolved powers effectively. There was broad agreement that the Executive should be operating on a stable footing for an extended period before further powers are transferred.
Stamp Duty Land Tax (SDLT)
A potential for devolution is SDLT, and Propertymark primarily focused on this tax in our response to the consultation, which ran between October and November 2022. We detailed how Propertymark is open to the idea of greater fiscal powers in Northern Ireland since taxation could be used to boost demand in the housing sector.
Citing the SDLT Holiday in England, which led to a 14 year high for sales agreed during January 2021, we argued that devolution could ensure policies could be directly targeted at addressing difficulties in local housing markets. However, we also expressed caution over devolution, as we acknowledge the view of our members that there is low confidence in the current Northern Ireland Assembly, given its current situation.
Propertymark members recommended that reducing the amount of SDLT people pay, or increasing the threshold before they are taxed, can encourage more first-time buyers to enter the market and reduce costs for those looking to downsize, increasing the supply of available property.
The Response Report suggested that SDLT could be an appropriate pilot candidate for devolution, as the revenues are lower, which would give the Executive an opportunity to analyse how reduced revenues are mitigated.
The Department of Finance will now consider the responses and present policy recommendations to the next Finance Minister and to the Executive.
