The government’s stamp duty surcharge continues to be a fantastic cash cow for the treasury. Official figures show that it raked in £670m in the first six months since it was imposed on 1 April 2016 comparing very favourably with the projected tax take of £625m for the whole of the first year. Such figures mean that it is highly unlikely to be repealed as it is providing more useful than expected amelioration of the national debt.
According to research by the UK’s largest estate agent, Countrywide, first time buyers are benefitting from the stamp duty change. In 2015, 16% of first time buyers faced competition from landlords, this fell to 11% in 2016, also music to the government’s ears.
There were 86,400 stamp duty transactions that attracted a 3% surcharge from April to September 2016. 60% of these were landlords and 21% were owner occupiers yet to sell the home they were moving from. 9% of purchasers were buying a second home and 2% were parents or relatives buying a home for their children.
The figures also show that microdevelopers buying to redevelop and sell at a profit accounted for 8% of these transactions. Johnny Morris, Research Director of Countrywide, said that these transactions were around half the levels that they were previously. This would suggest that the stamp duty surcharge is severely affecting small developers, though softening house prices are also likely to be a factor.