Within the last year, figures have shown that the sum of tax gathered from the government through stamp duty has fallen by £1 billion.
HM Revenue & Customs have shown that the tax collected from the stamp duty on property sales have decreased from £12.9 billion, in 2017 to 2018 tax year, to £11.9billion in 2018 to 2019 tax year.
Even though cash from the stamp duty payments are down, this has not affected the capital gains tax payments. This gets underway when a property, such as the buy-to-let home is sold. This has increased from the year before, which was £7.8 billion, with it now being £9.2 billion.
The drop in stamp duty has been blamed on the decrease of purchases for buy-to-let properties and also the reduction in purchases of properties from the top end of the market. Another reason for the fall in stamp duty is the majority of first-time buyers are benefiting from first-time buyer tax relief.
The quantity of homes that have been purchased as well as being sold within the UK, has rose month-on-month. These figures were released by the HMRC showing that it had rose by 1.4% in March and within the last year it has rose to 6.8%.
Within recent years there has been several changes to the Stamp Duty. It has changed from the slab system that it was in 2014, to be an amount charged on a whole purchase price to a negligible one that bear a resemblance to income tax. The previously mentioned saw individuals who are higher on the scale paying more tax while those who are lower on the scale paying less.
George Osbourne, a previous Chancellor of UK, announced another additional charge stamp duty on second homes. This was put in place to control the thriving buy-to-let property market and therefore giving first-time buyers an extra helping hand.
By 2017, the stamp duty had been eradicated for most of the first-time home buyers by the Government.
The UK’s property market is said to be ‘holding steady’ amongst current political chaos is the overall agreement between various analysts after taking the newest HMRC transaction numbers into consideration.
This masks a slowdown in London and the South, however, while regional cities are doing better.
Private Finance director, Shaun Church, stated ‘’Property transactions have flat lined over the past year, with monthly totals consistently hovering around the 100,000 mark.’
However, director of Legal & General Mortgage Club, Kevin Roberts, proposes that even though the transaction figures are encouraging, they are hiding more profound problems.
He further went onto say, ‘The continued support we’ve seen from the Government to help those lower down the housing ladder is to be welcomed, but if we are to increase property transactions, this means helping those at the other end too.’
Lauren Williams, Pali Ltd