There has been a significant drop in stamp duty receipts, new figures show.
UK property transactions fell by more than a fifth to 1.2 million homes in the year to March, while mortgage lending last year was down 23% to £130bn, according to UK Finance.
Consequently, stamp duty receipts fell by 24% to £11.6bn in the year to March, reflecting the fall in home transactions over the last 12 months.
But in March stamp duty charges for homebuyers lifted 10.6% to £864 from February, as the market continues to improve.
The Office for Budget Responsibility’s Economic and Fiscal Outlook shows property taxes – including Stamp Duty, devolved property taxes, and the Annual Tax on Enveloped Dwellings – are expected to increase by £1.3bn this year, and continue to increase year upon year – reaching £22.1bn in 2028-29.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “The Treasury has taken an almost £4bn hit because there were roughly 200,000 fewer property transactions last year. But the tax burden for homebuyers hasn’t lightened at all, they are still paying thousands of pounds to move home.”
The chancellor Jeremy Hunt is reportedly considering stamp duty and national insurance cuts before the next general election.
Hunt has previously hinted there could be another “fiscal event” before voters go to the polls in an attempt to boost the Conservatives’ tax-cutting credentials.
The Times reported that the Treasury was considering plans to increase the threshold at which people buying a house would need to pay stamp duty from £250,000 to £300,000 in the pre-election autumn statement, meaning nearly half of new homebuyers would not pay the tax. It is believed the move would cost about £3bn a year by the end of the decade.
Stinton continued: “Once again the rumours have started circling that there could be a cut to stamp duty in the Autumn Statement, but we’ve heard that one so many times it now feels like the Treasury crying wolf. Signalling a cut to Stamp Duty could make future buyers hold fire on their purchase, which may all be for nothing if the rumours don’t amount to anything concrete.
“What buyers need is a definitive review of Stamp Duty, one which also addresses other issues like support for downsizers or helping to make homes more energy efficient, rather than using it like a political beach ball to score votes.”
A Treasury spokesperson said “any fiscal events would be announced in the usual way”.
Comments (4)
Let me guess, as before so it will be again: some miserly cuts for the majority and significant cuts for the few. Just more BS from the BS party.
Wait until the reds get in, you will have a lot more to complain about.
Yes a lot of people have never experienced life under the pitchfork brigade. The classic is the infighting.
Stamp Duty should just go back to the simple 1% as it was for everyone pre Gordon Brown and Labour. Simple. More people move, more money for Governments to waste.