Nearly half of stamp duty land tax (SDLT) raised in the third quarter came from property transactions by landlords and second home purchasers who paid the 3% surcharge, with the number of buy-to-let properties increasing by 25,800
Since the introduction of the 3% stamp duty levy on 1 April 2016, there have been 86,400 transactions of buy-to-let and second property purchases accounting for £1,288m in total SDLT receipts, of which £670m was generated through the higher rate of SDLT.
The estimated receipts for Q3 of 2016 was £2.2bn from residential transactions, up 12% on the previous quarter reflecting the new 3% surcharge, while non-residential transactions accounted for £708m, which were down 23% on Q3 2015.
The amount from SDLT receipts for Q3 of 2016 are the highest they have been for a single quarter since the statistics began in 2008.
The number of SDLT liable residential transactions that are valued at £40,000+ for Q3 of 2016 total 235,000, representing a 27,100 increase on Q2’s figure of 207,000.
Of the 235,000 properties, 56,000 count as additional properties and therefore endure the 3% surcharge. This has increased by 25,800 from Q2’s number of 30,300.
Accountants, Blick Rothenberg, have claimed that the introduction of the 3% surcharge can be seen as a ‘back door’ increase to SDLT rates.
Nimesh Shah, partner at Blick Rothenberg, said: ‘We are probably looking at the highest number of SDLT receipts ever for one quarter. But the fact that nearly 40% comes from property transactions which were subject to the 3% surcharge confirms our suspicions that the introduction of this measure was effectively an increase to SDLT rates ‘by the back door’.
‘The introduction of the 3% surcharge from 1 April 2016 re-balances that lost tax revenue from the earlier change and the latest figures would confirm that it worked.’
The added 3% rate are charged on additional residential properties such as, buy-to-let property and second homes, that are valued over £40,000.
Paul Haywood-Schiefer, assistant manager at Blick Rothenberg, said: ‘This is almost a 100% increase on the position in Q2 of 2016, where the sales of second or additional properties only amounted 21% of the total SDLT receipts. The likelihood is though that many of the sales of second or additional properties had been rushed through in March to beat the 3% rise.
‘Whilst Q4 of 2015 and Q1 of 2016 saw 112,560 more residential sales than Q2 and Q3 of 2016 (689,720 to 577,160), the tax receipts collected were £477m less (£3,707m to £4,184m). It is clear that the additional 3% is making a difference.’
Quarterly Stamp Duty Statistics are available here.
