Stamp duty tax revenue is 34 per cent higher year-on-year, the greatest increase across all taxation categories, in spite of transactions falling 12 per cent for the same period.
The report states that the significantly higher receipts in April, compared to April 2021, “can be explained in part by the lower tax rates last year due to the SDLT residential holiday which finished at the end of September 2021.”
Monthly stamp duty receipts for the year-on-year comparison of 2021-2022 are still significantly higher than all preceding years since 2018 for all months bar August and May.
By comparison, overall receipts for business tax in April 2022 are £3.8bn, which is, again, £500m higher year-on-year. This years’ biggest earner for the treasury was income tax, capital gains tax and national insurance at £38.9bn, £6.6bn higher than April 2021.
The figures provided by HMRC include first time buyer’s relief from November 2017. HMRC also mentions that comparisons are still affected by the fall in sales and stamp duty relief during the 2020/21 tax year.
The market reacts
Market leaders have called for the stamp duty model to be reworked to increase transactions to stimulate borrowers during the cost-of-living crisis and rising house prices.
Tomer Aboody, director of MT Finance, said: “Once again we need to ask: Isn’t it time to rework the stamp duty model in order to assist the market, encourage more people to sell and contain pricing?
“Transactions are dramatically lower than the same month last year when the stamp duty holiday was in place, providing sellers and buyers with further motivation to move.
“It’s therefore not surprising that we are seeing month-on-month growth in house prices due to reduced stock levels, increased competition and still low interest rates, although these are on the rise.”
Stamp duty is also having an effect on smaller landlords that are selling up as a result, presenting an opportunity to portfolio landlords, according to Anna Clare Harper, director of IMMO.
She said: “Many smaller ‘mom and pop’ landlords are increasingly seeing the 168 laws and regulations governing residential property and its management, rising interest rates and the impacts of Section 24 on their tax bills, and re-evaluating their portfolios.
“Many are selling up. These homes are vital to provide much needed rental homes for people and communities up and down the country. Investors looking to buy, improve and rent out these properties have a great opportunity to help improve the quality of housing as the pace of transactions continues.”
Richard Pike, sales and marketing director at lending platform Phoebus Software, believes that the high revenue to the treasury won’t last as the cost of living crisis hits “together with another potential interest rate rise in a matter of weeks,” adding, “We could be looking at a very different picture in another three months.”
“Nonetheless, even if house purchase numbers do suffer, lenders will no doubt be seeing an increase in borrowers looking to remortgage and fix their rates. It also looks increasingly like those fixed terms will be for more than the traditional two or five-years.”
