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Taxman’s Stamp Duty take increases even though overall transactions drop thanks to additional properties surcharge

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HMRC saw Stamp Duty receipts rise from £8.23bn in 2016 to £9bn in 2017, despite a fall in the overall number of transactions.

The increase in the taxman’s take was thanks to a 3% surcharge on second homes buy-to-lets, which has more than offset a fall in overall transactions.

The value of additional Stamp Duty receipts increased from £2.4bn in 2016 to £4bn last year and £231m has been refunded over both years.

HMRC’s Quarterly Stamp Duty Statistics for December 2017 suggest that there were 891,600 transactions liable for Stamp Duty and 223,600 below the £125,000 threshold.

This indicates that there were 1.12m sales in 2017.

Some of the numbers are provisional as buyers technically have 30 days to pay Stamp Duty and some buyers may claim back the additional tax surcharge if they have sold their previous main residence.

By comparison, HMRC figures for 2016 showed there were 1.13m both liable and non-liable sales.

This suggests a year-on-year drop in sales, but the figures also show the number of additional property purchases has increased.

Of the 891,600 Stamp Duty-liable transactions in 2017, 245,100 were for additional properties.

In comparison, there were 149,600 liable additional property sales recorded in 2016, although the extra 3% charge only came in during April of that year.

These figures may change if buyers were in the process of selling their main home at the same time and later apply for refunds. They have 36 months to do this.

So far there have been 18,900 refunds for additional property transactions.

The transaction numbers are higher than Land Registry figures EYE reported on earlier this week and also suggest a smaller annual drop.

The latest Land Registry Price Paid Data suggested there were 850,281 residential property transactions registered in the whole of 2017 in England and Wales.

HMRC covers Northern Ireland as well but it is believed the disparity with the taxman’s figure of 1.12m could be due to the time lag in registrations at the Land Registry of between two weeks and two months.

By contrast, Stamp Duty payments, which HMRC bases its data on, must be submitted within 30 days. Additionally, HMRC records corporate sales whereas the Land Registry doesn’t.

Both parties were unavailable for comment.

The biggest boost in transactions was among those in the £250,000 and £500,000 price bracket during the fourth quarter, up 6% annually to 84,400, however, purchases in the £1m and above bracket were flat at 3,800.

Nick Leeming, chairman of Jackson-Stops, suggested this may have been due to first-time buyers springing into action amid the Stamp Duty exemption announced in November.

He said: “Transaction volumes at this level remain consistent with previous quarters and have been relatively substantial.

“Stamp Duty has indeed been a good earner for the HMRC, with estimated receipts for this quarter reaching £2,5bn from residential transactions but we can’t help but think Government has missed a trick by failing to reduce Stamp Duty levels across the board.

“If Chancellor Philip Hammond was to take steps to reform the impact stamp duty has on the top end of the market, even just marginally, not only would Government see revenue from receipts increase but it would also get the market moving again at all levels and not just at the lower end.”

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Source:: Taxman’s Stamp Duty take increases even though overall transactions drop thanks to additional properties surcharge