The 3% Stamp Duty surcharge for buy-to-let landlords and second homebuyers has boosted revenue for the Government, according to new data from HM Revenue & Customs (HMRC).
Due to the 1st April deadline, the highest ever Stamp Duty revenue for a single month was recorded last month.
Stamp Duty Surcharge Boosts Revenue for Government
The figures show that the Government generated almost £1.2 billion of Stamp Duty in April from a total of 173,430 property transactions in March, largely fuelled by high activity in the buy-to-let sector.
Nimesh Shah, a partner at London-based chartered accountants Blick Rothenberg, says it was “inevitable” that April would be an exceptional month for Stamp Duty revenue, as buy-to-let landlords rushed to beat the surcharge.
“Changes in the tax system lead to behavioural change, and the advance warning by the Government that Stamp Duty would increase for second purchases from 1st April 2016 is certainly evidence of opportunistic buyers wanting to beat the tax rise,” claims Shah.
This guide will help you understand how the tax change will affect you: https://www.justlandlords.co.uk/news/landlords-guide-stamp-duty-surcharge/
Although property transactions surged in March – ahead of the deadline – significantly fewer homes changed hands in April.
Between March and April, the number of property transactions dropped by a huge 45%, as landlords avoided paying the higher tax rate.
Assistant Manager at Blick Rothenberg, Paul Haywood-Schiefer, comments: “With the rush to get these transactions completed in April, it is inevitable there will be a slowdown in the market in the months ahead. Following this major upheaval in the tax, it will be interesting to see how property transactions and Stamp Duty receipts fare over the next few months, as the housing market relaxes itself. Those looking to purchase an additional property will be contemplating the increased Stamp Duty costs, while those with two properties may not want to sell, knowing they will have additional Stamp Duty to fund on replacing the second property.
“For now, the overall effect on the Treasury is positive, as Stamp Duty receipts for the previous 12 months, which hit £11 billion, have totalled almost as much as capital gains tax and inheritance tax put together, at £11.7 billion, and further demonstrates how the tax on property has boosted the Treasury revenues. It has also addressed an area in which the Government had expected to lose out.”