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Stamp duty holiday drags tax receipts down £540m

  • 03/02/2021
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Stamp duty holiday drags tax receipts down £540m
Tax income from stamp duty on property purchases fell by more than £540m in the last three months of 2020 compared to the same period in 2019.


This was due to the stamp duty holiday on residential property transactions of less than £500,000 during the three months from October to December, which prompted a 14 per cent increase in sales.

Overall Stamp Duty Land Tax (SDLT) receipts totalled £2.76bn in Q4 2020, down 16 per cent from £3.3bn in Q4 2019. It was, however, up 47 per cent from Q3 2020.

Residential receipts were down 22 per cent to £1.8bn compared to the £2.3bn in Q4 2019 – this was despite transactions being up 16 per cent during the same time frame.

HM Revenue and Customs (HMRC) acknowledged the reduced tax income was likely caused by the stamp duty holiday.

HMRC also noted that the large drop in the number of claims benefitting from First Time Buyers Relief for the last two quarters was misleading.

This is because since the introduction of the residential SDLT holiday on 8 July, there is no requirement for first-time buyers to claim the relief.

HMRC reported that 61,800 transactions were liable to the three per cent surcharge for additional dwelling purchased such as second homes and buy-to-let properties.

The three per cent element generated £333m in receipts, down 19 per cent compared to 2019 Q4.

It added that the percentage of residential receipts from these transactions has remained similar at 48 per cent when compared to Q3 2020 and Q2 2020.

Pressure has been mounting on the government to extend the stamp duty holiday past its 31 March cut off to allow transactions already in the pipeline to complete.

A petitions committee debate of MPs on Monday heard calls for a tapering of the deadline to avoid a cliff edge scenario.

However, the government is currently unmoved and has maintained all along that it would not be extending the relief measures.


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