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HMRC Stamp Duty take on investment property soars

Q4 report shows 20% more revenue from Stamp Duty than 2015.

Sheila Manchester

The tax take on investment property soars again – is it fair? HMRC’s quarterly stamp duty statistics for Q4 2016 have been published, recording £2,379 million from residential property, delivering a super-sized Christmas bonus to the tax man – 20 per cent more than in the same quarter of 2015.

This adds to the HMRC pot, giving a year-to-date estimated total of Stamp Duty receipts 17 per cent higher than the same period in 2015.

Is the tax take fair?

Nick Leeming, Jackson-Stops & Staff Chairman, says the Government is doing extremely well out of property investors, “So far £1,190 million worth of stamp duty receipts are estimated to be attributable to the additional 3 per cent element payable on second homes, a significant windfall for Treasury coffers. Between Q2 and Q3 the number of second homes liable for the 3 per cent surcharge nearly doubled.

“This increase is understandable as many buy-to-let investors would likely have rushed to make purchases before April 1st, but the number of liable second home transactions is up again in Q4 to 62,800.

“The data suggests that buy-to-let investors are not being deterred by the new tax which is supposed to be dampening demand from this group to the benefit of first-time buyers.

True impact on rental market

“We will see the true impact of this policy in time, but my fear is that additional costs will be passed on to tenants. The better solution is a real concerted drive to build more homes, rather than targeting buy-to-let investors – I hope the upcoming Housing White Paper contains a real blueprint for change in this regard.”

The tax take has brought ever-increasing revenues to the Government since 2010-11, following the disastrous year in 2008-9, when stamp duty taxes dropped from £1,011,500 to  just £401,900.

Key points:

The number of second homes liable to pay stamp duty increased to 62,800 in Q4 2016, up from 56,200 in Q3 and 30,400 in Q2

The government made £519 million from the three per cent surcharge on second homes in Q4 2016 – and £1,190 million since Q2 2016

As well as buy-to-let investors, the second home three per cent stamp duty tax can apply to those purchasing holiday homes and parents buying for children, for example.

Link to data: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/586275/Quarterly_SDLT_Jan_2017_circ.pdf

 

January 31, 2017

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