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Government rakes in an extra £2bn a year thanks to Stamp Duty surcharge

The Government looks increasingly unlikely to heed calls to ditch the 3% Stamp Duty surcharge on additional home purchases after seeing the Treasury coffers swell by 20% extra receipts.

For the same number of property transactions as two years ago, the Government has pulled in an extra £2bn in Stamp Duty Land Tax thanks to the surcharge.

The calculation is from accounting, tax and advisory practice Blick Rothenberg.

The latest statistics released by HMRC show that the number of property transactions in the 12 months to July 31 was 1,204,730, which equates to £12.4bn in SDLT.

The transaction figures are broadly the same as the year to July 31, 2015, when there were 1,205,700 transactions, bringing in £10.4bn.

It means that SDLT receipts have increased by 20% in the same period, equivalent to an extra £2bn in tax.

Robert Pullen, director at Blick Rothenberg, said: “Some of this increase could relate to general property price increases, but it is likely that the majority relates to the changes from April 1, 2016, which added an additional 3% SDLT for purchases of additional residential properties.

“The policy intention was always stated to be to realign the residential property market to make it fairer for first-time buyers.

“It is becoming clearer, however, that as prices continue to rise the measure has succeeded only in generating extra tax for HMRC as well as a sluggish property market.”

Pullen added: “The Government will need to urgently consider whether the additional 3% SDLT policy is helping achieve fairness in the property market, or if it is creating more problems than it is solving.”

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Source:: Government rakes in an extra £2bn a year thanks to Stamp Duty surcharge