Stamp Duty Hike Has Yielded Government ‘Double the Money’ Than Estimated
10th Sep 2017
The increased Stamp duty charged for homeowners and buy-to let investors has raised twice as much for the government than initially estimated. A leading accounting, tax and advisory practice latest analysis claims that the HMRC has received almost £2billion since last year when the 3% extra stamp duty charge was introduced. The Treasury predicted that it would receive an extra £1billion a year between 2016 and 2020 and so far it has ‘doubled its money’ in its first year. The new stamp duty surcharge of an extra 3%, scathingly known as ‘the landlord tax’ within the private rented sector, must be paid on top of the normal duty by buy-to-let investors and homeowners buying a second home.
There was widespread concern that the extra stamp duty charge would have an impact on BTL property investors with a fall in demand, however figures from the analysis shows that this did not happen. The firm was able to calculate the £2billion figure by comparing the Treasury’s data from July 2016 to July 2017 against the year ending July 2015. Surprisingly the two periods showed that the numbers of residential properties purchased was virtually the same. In the twelve month period up to July 2017 the HMRC received £14.billion in stamp duty, whereas in the year up to July 2015 it had taken £2 billion less. Some of the extra revenue could be put down to house price increases, however the majority is a direct result of the surcharge.
Director of the firm, Robert Pullen, said: “The Government will need to urgently consider whether the additional 3 per cent stamp duty policy is helping achieve fairness in the property market, or if it is creating more problems than it is solving. The policy intention was always stated to be to realign the residential property market to make it fairer for first time buyers. It is becoming clearer, however, that as prices continue to rise the measure has succeeded only in generating extra tax for HMRC as well as a sluggish property market evidenced by the number of property transactions falling.”