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Homebuyers pay £957m in stamp duty in April

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  • 22/05/2024
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Homebuyers pay £957m in stamp duty in April
The stamp duty land tax bill for house purchases in April totalled £957m, higher than the £918m paid during the same month last year.

So far this year, £3.4bn has been paid in stamp duty taxes, which was £191m lower than the same period in 2023 data from HMRC showed. 

This could be due to the lower number of residential transactions, with more than 17,000 fewer taking place in England during Q1 when compared to last year. 

Data from Land Registry showed residential transactions fell to a four-year low in the first three months of the year, with just 192,500. This was also the first time since 2020 that transactions had fallen below 200,000. 

In response to today’s figures, Coventry Building Society made calls to reform stamp duty. 

The mutual said when the stamp duty threshold returns to its usual level of £250,000 in March next year, the average tax bill for a home would rise from £2,386 to £4,886. 

The stamp duty threshold was raised by former Chancellor Kwasi Kwarteng in the 2022 mini-Budget, and made temporary by his successor Jeremy Hunt during the Autumn Statement. 

Jonathan Stinton, head of mortgage relations at Coventry Building Society, said: “Paying thousands of pounds in stamp duty could easily disincentivise any would-be buyers and keep people from moving up and down the ladder as freely as they would like. It could cause a prolonged sag in the market, which then prompts drastic measures to get it moving again, resulting in another boom/bust cycle – like we saw with the 2020 stamp duty holiday.  

“Previous stamp duty changes haven’t stood the test of time – they’ve been quick-fixes which have only helped buyers in the short-term. Now is the time for carefully considered reform, taking into consideration some of the issues facing buyers and sellers, with the aim of building long term stability rather than a sudden sharp boost in numbers.” 

Stinton also said today’s drop in inflation to 2.3% could prompt the Bank of England to cut the base rate sooner and result in lower mortgage rates. 

 

IHT intake hits £683m 

The inheritance tax (IHT) paid in April totalled £683m, which was higher than March’s £676m. 

This was also up on the tax intake of £597 during the same month last year. 

So far this year, HMRC has collected £2.49bn in IHT, higher than the £2.38bn paid in 2023. 

Shaun Moore, tax and financial planning expert at Quilter, said: “As we enter into election season, it would be sensible for either party to reassess the UK’s IHT landscape and change what is no longer fit for purpose. 

“When the party manifestos are published later this year, we will see how both parties hope to evolve the inheritance tax system that has been in a state of paralysis for too long leading to these types of figures.” 

He added: “Some of the measures that could help to alleviate the tax burden could be to drop the IHT tax rate to 30%. But such a tax cut is unlikely to be too much of a vote winner given that only a very small percentage of the UK public actually pay IHT. 

“However, there are opportunities to improve the inheritance tax system more generally which would iron out some of the complexities and the inequalities.” 

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