Brexit Blamed For Fall In Stamp Duty Receipts

Stamp Duty Falls
Analysis of the housing market shows a dramatic fall in the amount of Stamp Duty Land Tax (SDLT) revenue received by the Treasury, with the blame placed on Brexit by the organisation who carried out the research.

This ties up with the fall in properties available on the market, as reported here.

A study performed by investment consultancy London Central Portfolio examined the number of transactions and stamp duty payments across England, Northern Ireland and Wales.

The figures

SDLT, payable when a property is sold for over £125,000 (with the exception of most first time buyers), was £2.66bn in Quarter 1 2019, compared to £2.78bn in the same period of 2018, a fall of 4%. Compared to Quarter 4 2018, there was an overall fall of 19%, although receipts for the first quarter of the year are typically lower than those for the final quarter. Revenue generated by residential receipts fell by over a quarter, at 26%.

46,800 first time buyers claimed tax relief on their property purchase, a fall of 23%, claiming a total £110m.

This is a fall of £34m compared to previous periods. In total, an estimated £680m has been claimed since the introduction of the scheme.

Revenue from homes described as additional dwellings also fell for the fifth consecutive period. Additional dwellings are those properties bought as second homes or buy-to-let and are subject to a 3% surcharge on top of the standard SDLT.

This tax is known as the Higher Rate for Additional Dwellings, or HRAD. The total raised from such sales was £811m, a fall of £54m, which represents a 6% drop on Quarter 1 2018.

However, for clarification, it is worth noting that the figures are not directly comparable to previous years’ figures as Quarter 1 2019 includes only England and Northern Ireland as SDLT for Wales was devolved at the start of Quarter 2 2018.

Sales

This reduction in SDLT receipts coincides with a fall in housing transactions, which decreased by 20% from 316,200 completed sales in Quarter 4 2018 to 253,900 for the first quarter of 2019. This demonstrates an identical pattern to Quarter 1 2018, and indeed similar falls for the same period experienced in the market for several years.

Completed sales for additional homes fell by 14.7% to 54,160, representing a slow down in this market too.

The response

In response to the findings, Naomi Heaton, chief executive of London Central Portfolio, saod: ‘Seasonality will have played a part as it traditionally takes a few weeks for buyers and sellers to get going after the festive period. However, there is no doubt which external force is having the most destructive impact on the UK housing market, and that is Brexit,’ she insisted.

‘This will make uncomfortable reading for the Exchequer, as the continued downward trend of falling receipts will be creating an ever-growing hole in the UK’s balance sheet,’ she added.

Author

  • News Desk

    Our news desk team includes a qualified architect, a freelance journalist, and a fanatical property expert who has over 12 years experience in the industry.

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