Love affair with property continues as stamp duty surges

Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, comments on the publication of the HMRC tax receipt and national insurance data, showing the love affair with property continues as stamp duty surges.

Key points from publication:

• Income tax and National Insurance receipts for April to June were £98.2bn, an increase of £13.4bn from the same period last year.
• This was largely due to a 3.9% increase in paid employees.
• It should also take account the 1.25 percentage point increase in National Insurance that came in during April.
• Stamp duty continued to soar – up 27% on last year.
• Inheritance tax receipts were also on the rise. This was largely due to a small number of higher than usual payments.
• Air passenger duty continued its post-pandemic revival – up £0.6bn on last year.

Helen Morrissey says:

“Our love affair with property continues as stamp duty continues to surge – soaring 27% to £5.2bn between April and June.

“The pandemic may have convinced people they needed more space and fuelled a move to larger properties but since then we’ve continued to see huge activity in the property market, and it is running red hot.

“Recent data from Rightmove shows asking prices are at an all-time high but even this isn’t enough to put people off wanting to get their hands on their dream home.

“How long this can continue is subject to debate. The same data shows the number of buyers is starting to fall while the number of people wanting to sell is on the increase. The cost-of living crisis may also lead to more people looking to tighten their belts. The likelihood is we will see the market start to cool off in the coming months.

“Added to this the stamp duty holiday was also still in force this time last year and will also have had an impact on the increased figures.

“Air passenger duty was also on the rise as the travel industry slowly gets back on the move after the pandemic. After two years staying at home not even the prospect of the widely reported chaos at airports is deterring people from heading off on that sunshine break. Receipts are still well below pre-pandemic levels, but they are rising.

“Income tax and National Insurance receipts continue to boom as more people return to the workforce. The 1.25 percentage point increase in National Insurance should also be starting to having an impact though this could become more muted as the threshold was increased in July.

“This means many people will either pay less National Insurance or not pay it at all.”

Kindly shared by Hargreaves Lansdown

Main article photo courtesy of Pixabay