Stamp duty revenues in England and Wales up strongly due to additional homes tax

The most expensive 10% of properties in England and Wales contributed around 60% of all stamp duty receipts in 2017 with Greater London the biggest at 39%, new research shows.

The basic rate stamp duty paid by buyers was £7,161 on average but in London this was four time higher at £27,232, according to the research from London Central Portfolio which analyses official figures from the Land Registry.

As a whole, residential stamp duty receipts increased by £1.3 billion in 2017 compared with 2016, reaching a record £9.5 billion while two London boroughs, Kensington and Chelsea and the Westminster, contributed in excess of £0.6 billion

However, much of the annual increase this was largely a result of the new 3% additional rate of stamp duty what was set to second homes, including buy to let properties which generated a fifth of all receipts.

Overall, 43% of the tax take, at £4.1 billion, was generated by buy to let investors and second home buyers and if this is excluded from the calculation then stamp duty receipts overall fall back to 2014 levels at around £7.5 billion.

The most expensive sale at £90 million for a leasehold flat in Knightsbridge Apartments, generated over £10 million in stamp duty for the Exchequer.

Naomi Heaton, chief executive officer of London Central Portfolio, said:

‘The findings indicate that the majority of the Exchequer’s £9.5 billion tax take is being generated by the 10% most expensive sales and that buyers in London are paying four times more stamp duty than the national average.’

She believes that the Government needs to be careful with any further policies targeting landlords.

She pointed out:

‘Contributing a huge amount towards the Exchequer’s tax take, landlords have been under increased public and Government pressure over the last five years.

‘Reliance on the stamp duty take from second properties, which pay an additional rate of 3%, to prop up the market is therefore a dangerous gamble. Representing almost half of all tax take, any new deterrent could start eating away at the public purse.

‘Unless the Government can start to stimulate property transactions again, which according to Land Registry have fallen 29% in England and Wales over the last decade, the outlook for future stamp duty revenues looks fairly grim.’

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