Propertymark members' concerns on devolution
Through one-to-one discussions and a survey of our members, Propertymark understands and acknowledges some significant challenges to devolving powers in Northern Ireland. 40% of surveyed members disagree that fiscal powers should be devolved, partly due to the current status of the Northern Ireland Assembly. However, when asked, the majority of members still viewed the potential of changes to Stamp Duty Land Tax favourably if it could be administered effectively.
Recommendations for change to fiscal policy
If changes are to be made to fiscal policy in Northern Ireland, Propertymark recommends that the following be considered:
- SDLT should be used to increase demand for housing in Northern Ireland. 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.
- If taxes are going to be used to raise local revenues, they must be done so in a way that does not negatively impact the housing market. Our concerns are that if thresholds are lowered or taxes are increased, that could lead to some homebuyers delaying moving for several years.
- Additional tax breaks should be considered to reduce landlords leaving the private rented sector. This is especially important in light of changes being introduced through the Private Tenancies (Northern Ireland) Act 2022 which includes minimum energy standards. These could cost up to and beyond £7000 for landlords to retain their property, therefore fiscal policies that reduce their costs should be considered to prevent landlords from leaving the private rented sector.
Devolution unlocks opportunities for the Northern Ireland Executive to introduce measures that help boost demand in the housing sector. Given the difference in house prices between Northern Ireland and England, it is important that Stamp Duty reflects house prices and supports the local economy, which devolution can provide. Reducing Stamp Duty has also led to a significant increase in market activity, as we have seen during the temporary freeze during the pandemic.
That being said, it is hard to ignore the concerns of our members and the potential for disruption for new policies to be enacted. We hope that the Northern Ireland Assembly returns to full operation to provide reassurances that devolved powers can be administered effectively.
