SDLT revenue from residential transactions drops in 2018

In total, the government collected £8.55 billion in revenue from residential property transactions last year, down from a record £9.47bn in 2017.

Part of the decline can be attributed to the introduction of reliefs for first-time buyers in November 2017, as well as the devolution of SDLT to Wales which took place in April 2018.

However, a fall in the number of high value transactions is also likely to have contributed to the drop in revenue.

HMRC figures show a 5.2% year-on-year decline in liable transactions with a value above £1m in 2018.

Whilst sales above this threshold only account for a small proportion of overall residential activity, they play a disproportionately important role when it comes to tax take. In the 2017/18 financial year, for example, £1m+ residential sales accounted for nearly a third (31%) of SDLT revenue, despite making up just 2% of total sales.

Liam Bailey, Global Head of Research at Knight Frank, said: “The latest data on stamp duty receipts confirms that high rates of stamp duty at the top end of the market are proving counter-productive in terms of maximising tax take. Very simply if you tax an activity there will be less of it and in this case: lower tax receipts; lower transactions and reduced labour mobility.”

HMRC said that a total of 241,300 FTB relief claims have been received since November 2017, when the government announced that first-time buyers purchasing a property up to £300,000 will no longer pay stamp duty. Further relief is available for purchases up to £500,000 to help first-time buyers in more expensive locations. The estimated total SDLT relieved over this time is £570m.