- Analysis shows stamp duty for the first eight months of 2021 was £7.6 billion
- This is £200m more in pre-pandemic 2019 from £7.4bn in the same period
- Stamp Duty Holiday Deduction Bill minus £500k. Higher profit was made even after being reduced to
- Stamp duty holiday expiring at the end of September
- The latest official figures also show that there was a jump in property transactions in August.
The Treasury has raised stamp duty by £7.6 billion this year – £200 million more than the same period in 2019 – despite a holiday that slashed take-home tax bills.
Coventry Building Society’s analysis claimed that between the start of the year and the end of August 2021, stamp duty land tax receipts were higher than in the same period in pre-pandemic 2019, when £7.4 billion was racked up.
The bumper tax came despite a stamp duty holiday to void the tax on the first £500,000 of the purchase price of a property by the end of June this year – a tax deduction of £15,000 on homes costing more or less.
A small tax break of zero still exists, up to the first £250,000 by the end of September and Coventry BS calculated that £12.3 in stamp duty between the start of July 2020 and the holiday beginning at the end of August 2021. Billion was paid.
Treasury boost: Treasury raised £12.3bn in stamp duty land tax receipts amid start of stamp duty holiday last July
Between July 2018 and August 2019, the closest 14-month period in the same months not affected by the pandemic, stamp duty was a little over £13.9 billion.
However, this means that the stamp duty tax was only 2.16 per cent lower in a normal year between July 2020 and August 2021, despite that period having several months of lockdown restrictions.
From July 2020 to the end of August 2021, the Treasury generated approximately £135 million more from SDLT than in the previous 14 months.
Total stamp duty receipts for 2020 were £8.6 billion, an increase of £5.2 billion between January and August 2020.
Back in 2019, and before Covid-19 hit the country hard, the Treasury pocketed £11.7 billion in SDLT receipts, with £7.4 billion generated between January and August 2019 at the peak of the pandemic higher than during the same period. 2020.
This August alone, the government received £910million in SDLT receipts, and £7.6billion from property transaction taxes over the past eight months.
Chancellor Rishi Sunak introduced Stamp Duty Holiday in July 2020 to boost the housing market and stimulate the economy.
Jonathan Stinton, head of arbitral relations at the Coventry Building Society, said: ‘Stamp duty remains a very attractive source of income for the taxman, even with the bulk of property purchases for more than a year. Discount given.
‘Obviously, there is still a very healthy market for high value homes, second homes and rental properties.’
Stinton said that, with the budget coming out on October 27, the government should consider raising the limits on which higher stamp duty rates apply.
They believe that the higher limit will ‘reduce the burden on average homeowners and not make much dent in HMRC’s revenue’.
‘When the holiday ends in a few days’, property tax bills for the average home buyer in England will more than double compared to 2014 when rates were last reviewed, Stinton said.
What is happening to stamp duty now?
The stamp duty holiday is coming to a complete halt on September 30, leading some experts to fear that the property market could witness a slump.
Buyers wishing to avail the stamp duty holiday must have completed the purchase of their property by September 30 to apply for the temporary tax exemption.
By the end of June this year, buyers did not have to pay stamp duty on the first £500,000 of the purchase price, meaning they could save up to £15,000.
However, the temporary stamp duty holiday prompted buyers to flood the market, with many facing overpaying for the home amid fierce competition in popular locations.
From 1 July until the end of September, buyers do not have to pay stamp duty on the first £250,000 of their property purchase.
But, from 1 October, stamp duty rates will return to pre-Covid levels, meaning the level at which tax has to be paid on the purchase of residential property will be £125,001 in England and Northern Ireland.
As of 1 July, no stamp duty is levied on the first £300,000 of the main residential property for first-time buyers, provided it costs £500,000 or less.
Surge in property transactions in August
Jump: A chart from HMRC showing asset transaction levels over time
According to data from HM Revenue & Customs, the level of property transactions in August rose by almost a third in the previous month.
HMRC said the provisionally adjusted estimate for residential property transactions of more than £40,000 in August was 98,300, up 32 percent from July.
The number of transactions was also 20.8 percent higher as compared to August 2020.
The non-seasonally adjusted estimate of transactions for the previous month was 106,150, up 28.0 per cent in July and 24.8 per cent last August.
This provisional estimate is close to levels recorded before the pandemic, such as the estimated 111,600 transactions for August 2019.
Ian McKenzie, chief executive of The Guild of Property Professionals, said: ‘After a year of frenetic activity, the property market took a brief pause for breath in July, but these August data suggest a sharp increase in sales. happened.
‘Homeowners know that still is a good time to put the “for sale” mark and property agents are starting to find more properties on the market.’
Gatehouse Bank chief commercial officer Paul Stockwell said: ‘Stamp duty alone is not responsible…