The 2% surcharge on the purchase of residential properties by non-residents was introduced on 1 April 2021. Up to the end of Q4 2021, to date this has resulted in 8,500 transactions paying £86m.
Residential property transactions in Q4 2021 were 12% lower than in Q3 2021, and 15% lower than in Q4 2020, the quarter after the SDLT holiday was introduced.
Non-residential property transactions in Q4 2021 were 10% higher than in Q3 2021, and 10% higher than in Q4 2020.
Meanwhile, total SDLT receipts in Q4 2021 were 22% higher than in Q3 2021 and total SDLT receipts in Q4 2021 were 55% higher than in Q4 2020.
According to the government, the change in receipts will have mainly been impacted by the lower residential nil rate band of £125,000 for Q4 2021 compared to £250,000 for Q3 2021 and £500,000 for Q4 2020.
Residential property receipts in Q4 2021 were 19% higher than Q3 2021, and 63% higher than Q4 2020, while non-residential property receipts in Q4 2021 were 28% higher than in Q3 2021 but were 39% higher than Q4 2020.
Up to Q2 2020 there were 540,900 claims that have benefited from first-time buyers relief, and the total amount relieved by these claims is £1,293m over the period.
During the last two quarters there was 89,000 claims made with £233m being relieved.
60,500 transactions were liable to HRAD in Q4 2021, with the 3% element generating £439m in receipts, an increase of 6% from the previous quarter, and a fall of 7% compared to Q4 2020.
The percentage of residential receipts from HRAD transactions has fallen by 2 percentage points, from 44% to 42%, when compared to Q3 2021.
Karen Noye, mortgage expert at Quilter, said: “New quarterly stamp duty statistics show that following the introduction of a 2% surcharge on the purchase of residential properties by overseas buyers, just 8,500 transactions have raked in £86m for the Treasury in the first year of the new rules being in play.
“With many central London properties laying empty as a result of overseas buyers purchasing prime real estate as an investment, the tax was introduced to try and make it a fairer market for Londoners often priced out.
“Clearly in its first full year in force there remains interest in property from overseas buyers even despite the global pandemic and the restrictions on travel.
“With the UK being one of the first countries to emerge from the pandemic London property may soon become attractive again if overseas buyers can stomach the additional tax. However, with house prices remaining very high it may be one step too far for this type of investor for the time being.
“Across the whole market the total SDLT transactions in Q4 2021, October to December, were 10% lower than in Q3 2021, but a total of 13% lower than in Q4 2020.
“These falls in the last two quarters were preceded by four quarters of growth as a result of the frenzied market during the stamp duty holiday.
“Today’s figures paint a picture of a housing market that is slowly getting back to some sort of normality. With interest rates on the rise and a cost of living crisis looming it’s likely that some of the wind is coming out of the housing market’s sails and prices may start to deflate after intense double digit growth.”
