Friday, 29 September 2017

Stamp duty receipts have soared since reforms which have helped to paralyse the property market.

Stamp duty receipts have soared by a third in the three years since the system was changed, while paralysing the top end of the housing market by leading to fewer transactions.

New figures from HMRC revealed that receipts have increased by 33pc since then Chancellor George Osborne hiked stamp duty for homes worth more than £925,000 in December 2014. This is equal to a boost of £2.14bn to the Treasury's coffers.

While revenues in the last year have increased by 18pc, transactions fell by 8pc. This fall in activity was caused by the stamp duty hike making it too expensive for many to move, as well as uncertainty caused by Brexit.

This boost to revenues came from the money collected from those buying additional properties, who must pay 3pc more stamp duty after changes made to the system in April last year. These landlords and second home buyers contributed 39pc of receipts.

In central London, revenues have fallen by 1pc due to the stamp duty reforms paralysing the highest value parts of the housing market. 

Mr Osborne's reforms, from a 'slab' to a 'slice' system, hiked stamp duty for homes worth more than £925,000, which despite leading to a fall in transactions, mean there has been a big boost to money raised from these sales. Homes worth more than £1m made up just 1.7pc of transactions last year, but 30pc of stamp duty receipts.

Across the whole of London, revenue increased by just 1pc, but it was boosted by a 9pc jump in revenue from the outskirts of the capital. 

Stamp duty raised in Kensington and Chelsea was more than that raised in the North East, Yorkshire & Humberside, and Northern Ireland put together, and 36pc of purchases there last year were additional homes, raising the exchequer £233m.

The mean amount of stamp duty paid on each transaction in the last year has increased by 27pc to £7,900. Nick Leeming, chairman of estate agency Jackson-Stops, said: “Prohibitive levels of stamp duty land tax have been a real drag on the UK property market over the last financial year." 

He added: “While the changes seen in December 2014 appeared to be good news for 98pc of home buyers at the time, the top end of the market has suffered and this, together with the additional 3pc tax surcharge, has had a knock-on effect on the rest of the market."

By Isabelle Fraser.
Culled from Yahoo News.

No comments:

Post a Comment