HM Treasury collected £5.2bn in stamp taxes between April and June this year, representing a 27% increase of £1.1bn on the same period last year, the latest government statistics show.
The latest figures show a significant 40% increase in the first half of this year to £7.5bn, compared to the same period last year, when the total raised was £5.4bn, according to analysis of HMRC receipts by Coventry Building Society.
Treasury says lower receipts in the tax year 2020 to 2021 were driven by a fall in property sales, market uncertainties surrounding the Covid-19 pandemic and the introduction of the temporary reduced rates for stamp duty on residential properties.
Meanwhile, the high receipts in March last year could be due to the strength of the property market alongside forestalling ahead of the introduction of non-resident surcharge, as well as a general uplift in economic confidence following the rollout of the vaccine and announcement of easing of lockdown.
The higher receipts in June and July, and then in September and October 2021 can be explained by higher numbers of transactions completed before the end of the stamp duty holiday which ended on 30 June for zero tax rate on the first £500k and 30 September for zero tax rate on the first £250k.
The higher receipts in December were driven by a surge in property completions with people wanting to be in their new home before Christmas.
February’s higher receipts were partly attributed to the economic impact of the pandemic.
Treasury explains that the significantly higher receipts from April this year, compared to the same period a year earlier, are in part by the lower tax rates last year due to the stamp duty residential holiday which finished at the end of September last year.
Commenting on the HMRC receipts, Coventry Building Society head of intermediary relationships Jonathan Stinton says: “It’s becoming clearer that this could be yet another record year for stamp duty receipts. That’s great news for the Treasury but people buying homes are facing a relentless rise in moving costs.”
“In the current environment, with the cost of living taking an even bigger bite out of people’s ability to save up for buying or moving home, soaring stamp duty bills are another stumbling block for the property market.”
“Review and reform of stamp duty looks long overdue. The average house price in England has risen by £99,000 – from £203,000 to £302,000 – since the existing tax thresholds were set in 2014.”
“If the current or future Chancellor is looking for possible ways to maintain a healthy revenue but reduce the burden on homebuyers, they should take a close look at the receipts when the stamp duty holiday was in force. There are more creative solutions available, such as incentives for greener, more energy-efficient properties, which would have the dual benefit of helping housing stock become more carbon neutral and reducing household bills.”
Hargreaves Lansdown senior pensions and retirement analyst Helen Morrissey says: “Our love affair with property continues as stamp duty continues to surge.”
“The pandemic may have convinced people they needed more space and fuelled a move to larger properties but since then we’ve continued to see huge activity in the property market, and it is running red hot.”
Coreco managing director Andrew Montlake comments: “Transactions are down significantly compared to June 2021 as last year’s data was skewed by the stamp duty holiday. The slowdown in transactions compared to May this year is likely to be a sign of things to come as people become increasingly cautious as rates rise and the cost of living crisis bites. However, for now at least, the jobs market remains strong and that will ensure transactions don’t go off a cliff.”
