Stamp duty receipts reach record high
Receipts from stamp duty surged to a record high thanks to rising house prices, higher rates on sales at the upper end of the market and the new surcharge on buy-to-let property.
Figures published by HM Revenue & Customs on Tuesday showed gross receipts from the tax on transactions of residential and commercial properties hit £11.7bn in 2016-17, up from £10.7 bn the year before.
The rise was partly down to big changes in the stamp duty regime in 2014 and a three percentage point surcharge brought in last year for buy-to-let and second homes.
The introduction of the surcharge triggered a rush to complete purchases before it came into effect, but payments completed at the end of March were not received by HMRC until the following month, pushing up the 2016-17 total.
Property market experts said the additional home surcharge was now playing a substantial role in the overall figures.
Lucian Cook said: “From the government’s point of view the surcharge is a bit of a win-win scenario. If it deters investors from entering the market, it levels the playing field for first-time buyers. If it doesn’t deter them, it generates significant revenues.”
Henry Pryor, a buying agent, said the combination of higher rates of stamp duty at the upper end of the market and the second-home surcharge had proved a highly successful earner for the Treasury. “It’s a foie gras-style goose they’ve managed to ram sufficiently to produce this extraordinary revenue receipt,” he said.
The increase will give little comfort to those in the housing market, including estate agents, developers and construction companies, who have argued for a reversal of changes to the duty regime.
“There may be lots of good reasons for Philip Hammond to be encouraged to look at stamp duty again, but there’s nothing in the numbers that allows him that flexibility. It is politically impossible for him to row back without being accused of helping his friends in the City,” Mr Pryor said.