Home movers flooding back to the market this summer have driven stamp duty receipts up by 27 per cent quarter on quarter, official figures show.
In quarter three, the treasury collected £1.9bn pounds in stamp duty taxes up from £1.5bn in quarter two. The number of transactions liable for stamp duty rose by 68 per cent between Q2 and Q3 from 149,000 to 250,500. Compared to Q3 last year, however, the value of receipts is down by 40 per cent from £3.2bn.
The nil rate threshold was increased from £125,000 to £500,000 for all purchases of residential properties in England and Northern Ireland. Wales and Scotland increased their thresholds to £250,000. The additional 3 per cent surcharge is still applied to purchases of second homes.
Transactions that attract the additional stamp duty charge reached 43,800 in Q3 generating £245m in stamp duty taxes, an increase of 13 per cent from the previous quarter, and a fall of 49 per cent compared to 2019 Q3. The percentage of residential receipts generated from the purchases of additional homes has remained stable at 47 per cent when compared to the previous quarter.
Chancellor Rishi Sunak announced the stamp duty holiday in the Summer Economic Update on 8 July to inject life back into the economy following the country’s first lockdown.
Since then, house prices and the volume of monthly mortgage approvals have hit record highs. Despite four months remaining until the end of the holiday, borrowers are being told to prepare their finances in case they miss the deadline due to log jams at the banks and in the conveyancing sector.
Andy Sommerville, director at Search Acumen, said: “Although the Stamp Duty threshold has been raised, meaning fewer properties are being caught by the tax, high levels of buyer activity has maintained a healthy stream of receipts for the Government.
“Sharp rises in house prices since the reopening of the property market has partially offset the reduction in lower valued properties liable for stamp duty. Upward pressure on prices for properties that were priced below £500,000 before the adjustment has pushed them above the new threshold.”
Samantha Partington is a freelance trade and consumer journalist writing about property and personal finance. Previously she worked worked for the Daily Mail and Property Week. She is the former deputy editor of Mortgage Solutions and editor of Specialist Lending Solutions.
Before becoming a journalist, Samantha worked as a mortgage broker and latterly for a mortgage, bridging and secured loan lender. Samantha is CeMAP qualified. Follow her on Twitter @SamJPartington1.