First-time buyer relief pushes number of transactions paying Stamp Duty to four-year low

Only two-thirds of residential transactions were liable for Stamp Duty during 2018, the taxman has revealed.

Stamp Duty receipts data from HMRC shows there were 189,800 transactions that had to pay the property tax in the fourth quarter of 2018, down 17% annually.

HMRC said this meant that only two-thirds of residential transactions have been liable for Stamp Duty since the first quarter of 2018, the lowest proportion it has been since the first three months of 2014.

Much of this is down to the first-time buyer Stamp Duty exemption introduced in November 2017, which was used on 60,700 transactions in the final three months of 2018, taking the total to 241,300, which is worth £570m of relief.

The report also showed that transactions paying the additional rate of Stamp Duty were down 8% annually in the final three months of 2018 to 60,000, but make up 33% of all transactions paying the tax.

These drops meant standard residential Stamp Duty receipts, excluding the higher rate charge, decreased by 7% annually to £1.29bn, while takings for the additional charge fell 6% to £1.04bn, giving a total of £2.3bn.

Commenting on the data, Paul Smith, chief executive of haart, said: “It is very promising to see Stamp Duty receipts are moving in the right direction for buyers.

“The Government is now only pocketing from two-thirds of the market – the lowest proportion since 2014. This is largely due to the exemption for first-time buyers, who have now collectively saved £570m since their cut was made in 2017.

“Whilst the Government has clearly got it right for first-time buyers, they are still getting it horribly wrong for buy-to-let investors.

“The Treasury is continuing to squeeze investors out of markets like London where more homes for rent are surely needed.

“Stamp Duty transactions are down 8% on the year and our latest branch data indicates that there were significant fewer landlords registering to buy in London in December compared with the year before. Action must be taken to halt the market decline.”

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/774126/Quarterly_SDLT_2018Q4_Main.pdf

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