The Treasury raised £1.1bn from the additional Stamp Duty charge in 2016, official data reveal.
Source of the article: http://www.propertyindustryeye.com
Stamp Duty receipt figures from HMRC show there were 149,400 residential transactions of additional properties accounting for £2.3bn of the property tax, of which £1.1bn is attributed to the additional 3% element.
The additional tax take has prompted the Residential Landlords Association to call for a rethink after the Treasury had originally estimated it would get £630million from the surcharge.
David Smith, policy director of the RLA, said at the very least, the Government should pause the start of the introduction, from April, of the mortgage interest changes to enable a better assessment to be undertaken of the likely impact of the policy.
He said: “In raising nearly twice as much in just nine months as the tax was predicted to make in one year this Stamp Duty windfall gives the Government a chance to back the rental market and support the development of new homes which we desperately need.
“At no stage has evidence been published to support the assertion that landlords are taxed more favourably than homeowners, or that they are squeezing first time buyers out of the market. Assessments by the Institute for Fiscal Studies and the London Schools of Economics contradict the Treasury’s position completely. It is also nonsense for HMRC to suggest that one in five landlords will be affected by the mortgage interest changes, when what matters is the number of properties affected.
“The Government has received far more money than it expected. We urge them to use this to support the country’s tenants and undertake a fuller impact assessment of a policy that has the potential to cause untold damage to the rental market.”
Overall, 882,800 residential properties were liable for Stamp Duty in 2016, up from 823,300 in 2015, raising a total of £8.2bn in Stamp Duty, up from £6.9bn in 2015.
Of the 882,800 figure, 149,400 were classed as additional properties.
The number of additional property transactions liable for Stamp Duty continued to increase in each of the three final quarters of 2016, from 30,400 in the second quarter to 56,200 in the third and 62,800 in the fourth. The surcharge was implemented last April 1.
Nick Leeming, chairman of Jackson-Stops & Staff, said: “The data suggests that buy-to-let investors are not being deterred by the new tax which is supposed to be dampening demand from this group to the benefit of first-time buyers.
“We will see the true impact of this policy in time, but my fear is that additional costs will be passed on to tenants.
“The better solution is a real concerted drive to build more homes, rather than targeting buy-to-let investors.
“I hope the upcoming Housing White Paper contains a real blueprint for change in this regard.”