The stamp duty holiday has led to a significant fall in the number of people paying this tax over the last quarter, according to the latest HMRC figures.

HMRC figures shows the number of property transactions subject to stamp duty land tax (SDLT) were 10% lower in Q4 2021, when compared to the previous three months (Q3 2021). These transaction were were also 13% lower than Q4 2020. 

This SDLT holiday was phased out between 30 June and 30 September last year. HMRC says this caused a substantial rise in the number of transaction being completed earlier in the year, with home buyers keen to avoid paying additional stamp tax charges.

Since this tax break started to be phased out, HMRC says there has been a fall in transaction over the last two quarters. Residential property transaction in Q4 2021 were 12% lower than Q3 in 2021 and 15% lower than in Q4 2020. 

Over the same period non-residential property transactions were 10% higher than both Q3 2021 and Q4 2020.

However, the figures show that despite a falling number of transactions that are subject to SDLT, tax receipts have risen. However the figures for the fourth quarter of 2021 are compared to the previous three months and the last quarter of 2020 – when the SDLT holiday was applied across a number of residential property bands. 

Higher house prices though will also be driving up the value of these receipts. 

In total SDLT receipts in Q4 2021 were 22% higher than in Q3 2021 and 55% higher than in Q4 2020. 

Residential property receipts in Q4 2021 were 19% higher than in Q3 2021 and 63% higher than in Q4 2020.

HMRC’s data also shows that the 2% surcharge on the purchase of residential properties by non-residents, which was introduced on 1 April 2021 has led to 8,500 transactions where this surcharge has been applied, raising £86m. 

Coreco managing director Andrew Montlake says: “Even though residential transaction volumes were down in the fourth quarter of last they were still high. 

“Activity levels have been massively skewed by the stamp duty holiday. Receipts rebounded in the final three months of the year as stamp duty was back at its normal levels. The Government will be pleased, if nobody else will.”

Quilter mortgage expert Karen Noye says the figures show that after “frenzied” activity during the stamp duty holiday, the housing market is slowly returning to normal. 

She adds the new surcharge on overseas property investors may raise more money in future, as London emerges from the pandemic and global travel restrictions start to ease. 

Mortgage switching platform Dashly CEO Ross Boyd adds: “It’s no surprise that transaction levels were down in the final quarter of last year, as the stamp duty holiday brought a significant number of sales forward.

“Understandably, many people rushed out to buy and activity levels went off the scale. But another reason why transaction levels are down is the fact stock levels are the lowest they have been for many years. Receipt levels bounced back in the final quarter because the stamp duty reliefs were no longer available.”