Propertymark has urged the Northern Ireland Executive to prioritise the implementation of fiscal measures for Stamp Duty Land Tax (SDLT) due to it having the largest impact on property agents out of all the proposed devolved taxes.

To better inform its response to the Department of Finance’s consultation on the devolution of more fiscal powers, Propertymark held a focus group of property agents from Northern Ireland which helped to provide greater insight into the impact Stamp Duty Land Tax (SDLT) on the housing industry and highlight the concerns property agents have over the Executive’s proposals.

While Propertymark and its members acknowledge there are unique challenges to devolve powers in Northern Ireland, which will need to be addressed, Propertymark still believes that the case for making changes to SDLT is strong.

When the body asked its members about the prospect of changes to SDLT, only 12 per cent stated that it should remain at current levels which suggests that many property agents in Northern Ireland have reservations over the current level of SDLT and it should therefore be prioritised. This includes Propertymark members who do not believe fiscal policy should currently be devolved, suggesting agents would welcome changes to SDLT despite their concerns with devolution.

Considering the impact SDLT has on the availability of housing stock, over half of Propertymark members surveyed stated that the amount of SDLT paid should be decreased or the threshold should be set in a way that encourages first time buyers to enter the market and others to downsize.

A further 35 per cent stated that property taxes should be aligned at a local level rather than as a reflection of UK house prices.

Propertymark stressed that by decreasing the amount of SDLT being paid and also removing the current additional supplement of 3 per cent that is paid when buying a second home, more people will be inclined to invest in rental properties, reducing the impact of landlords leaving the sector.

The industry body has said that greater control over Stamp Duty rates and thresholds will enable the Executive to ensure taxation reflects house prices in Northern Ireland and respond more effectively to price changes.

In addition to improving the housing market for homeowners, Propertymark responded to say that by implementing innovative fiscal measures, it can spur economic activity within the private rented sector, which Propertymark members have described as being “dead on its feet” for several reasons. These include:

• drastic decrease in available properties having halved between March 2019 and March 2022, with many landlords reducing their portfolios. This has led to situations where renters pay above the asking price for rent or struggle to find places to move.
• the UK Government made changes to Section 24 of the Finance Act, which resulted in landlords having their tax relief reduced since 2015 including the withdrawal of tax relief on mortgage interest relief and the introduction of an additional three per cent charge when buying a second home. The opportunity to devolve SDLT, could pave the way for the Northern Ireland Executive to discuss the impact of Section 24 changes with the UK Government and seek further improvements to the tax system for landlords in Northern Ireland.
• the Private Tenancies Act (Northern Ireland) 2022 will require landlords to meet new standards, including energy efficiency and electrical safety standards. While Propertymark agrees with promoting higher standards within the sector, it believes that this will come with increased costs to landlords which may cause some to exit the industry.

The full consultation response can be found here.