What Does the Future Hold for Stamp Duty

After the first full year under the new stamp duty system it would seem that HMRC has had a small gain in revenue. However these figures are somewhat deceiving, and if one extrapolates the increase in transaction in March 2016 to beat the extra 3%  stamp duty on secondary homes, then the net SDLT receipts will show a loss. We believe that next quarter’s figures will paint a bleaker picture as the pronounced slow-down in transactions in the South East starts to trickle down through the rest of the country which up until now had still been seeing continued price growth.

Impacted by onerous transaction taxes, and further compounded by economic uncertainty, the UK’s super-prime market has been under downward pressure since SDLT changes introduced in 2014.  Further evidence of this is seen in the recent Land Registry data released which shows just 5 transactions taking place over £10m+ in the three months till August 2016.  That’s down 86% on the same period in 2015, when 35 £10m+ sales were officially registered.  It’s important to remember, however, that the very nature of super-prime deals means that many never end up on the official register.

We can only hope that there is a continued downward pressure on sterling and that the Chancellor sees sense and takes the opportunity to reduce the stamp duty thresholds, now that the tax receipts seem to show a decrease in revenues coming the government’s way.

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