Stamp duty receipts soar as buy-to-let investors are undeterred by tax hike
The Treasury collected 18pc more stamp duty from the sale of residential properties last year than in 2015, pushed up by purchases of buy-to-let investors, who appeared undeterred by a 3pc tax hike in April.
The total stamp duty take last year was £8.28bn; without the boost from stamp duty on additional properties, receipts would have been down year-on-year.
One in five of all homes bought in the last six months of the year were additional properties, and this raised £962m for the Treasury’s coffers, representing 21pc of the tax take during this period.
This amount was higher than forecast by the Office for Budget Responsibility, which had pencilled in £660m for the 2016-17 financial year.
Lucian Cook, head of residential research at Savills, estimated that there was “significant cash investment in buy-to-let”, with fewer than 40,000 of the 119,000 additional homes during the period bought using a mortgage.
Mr Cook added: “It’s about the appetite for buy-to-let properties with cash buyers. While the number of mortgage investors has come off, it has remained pretty robust for cash buyers. They have made a significant contribution to stamp duty receipts.”
Since stamp duty for buy-to-let properties was hiked by 3pc in April 2016, the Treasury has taken in £1.19bn of taxes from these purchases. While the move has been lucrative for the Treasury, experts suggested it had done little to help the first-time buyers it was intended to benefit, at the expense of landlords.