Last month was a record for stamp duty receipts as landlords and second home buyers settled their tax bills after rushing through purchases ahead of the 1 April hike.
The Government generated nearly £1.2billion in stamp duty in April from a total of 173,430 property transactions in March, data from HMRC shows. The three per cent surcharge on buy-to-elt and second homes arrived on 1 April and sees a typical tax bill triple.
This is the highest amount of stamp duty recorded in a single month while the number of transactions in March was nearly more than double that of February.
The stamp duty surcharge seems to also been a catalyst for a huge fall in transactions last month.
There was a drop of more than 100,000 residential property transactions in April from March’s bumper figures.
This is the lowest number of residential property transactions since February 2013.
Nimesh Shah, partner at accountancy firm Blick Rothenberg, said: ‘It was inevitable that April would be a bumper month for stamp duty revenue as buy-to-let investors scrambled 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 1 April is certainly evidence of opportunistic buyers wanting to beat the tax rise.’
The addition of a three per cent per cent extra charge for buy-to-let and second homes on all stamp duty bands above a £40,000 starting level more than trebled the bill for buying a £275,000 home – hiking it from £3,750 to £12,000.
House price indices have shown that this spike in activity helped drive up values in the run-up to the changes.
According to data from the Office for National Statistics, prices were up 2.5 per cent in March on the previous month. In London, they grew by £30,000 – or roughly £1,000 a day.
Statistics from the Council of Mortgage Lenders also showed that buy-to-let purchase mortgages were up a mamoth 290 per cent in March compared to last year.
Blick Rothenberg said that stamp duty receipts for the previous 12 months of £11billion have totalled almost as much as capital gains tax and inheritance tax put together.
Nimesh adds: ‘Despite the change in the way stamp duty was calculated in December 2014, which meant that most property purchases (those below £937,500) would result in less tax, the tax revenue is now £400million up on the previous 12 months.
‘The Treasury predicted the new system would cost them £760million in 2015/16, but the announcement of the additional three per cent surcharge has dramatically reversed that projection in the Government’s favour.’
Click here to view the original article “Taxman picks up record £1.2bn in stamp duty in a month”
If you would like to be kept up to date with Private Rented Sector news and views please visit our Facebook page or our Twitter page or complete and send the form below to receive our FREE email newsletters:
[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”]
Error: Contact form not found.
[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]