Stamp Duty receipts hold steady, as first-time buyers claim £1bn in tax relief
The number of Stamp Duty transactions recorded in the last three months of 2019 were 314,700, according to Government figures, on a par with the same period in 2018.
The amount received by the Government from the tax was also broadly unchanged over the last year. Receipts were £3,299 million in Q4 2019, less than 1% higher than in the fourth quarter of 2018.
Andrew Montlake, managing director of mortgage broker, Coreco, said: “For both Stamp Duty transaction numbers and receipts to have come in at roughly the same level as 2018 underlines the resilience of the property market in the face of Brexit turbulence.
“There was certainly no surge in the fourth quarter but neither was there a collapse and that’s proof of how many people wanted to get under a new roof before the sky potentially fell in.”
First-time buyer bonus
First time buyers’ relief (FTBR) was introduced in November 2017, meaning first-time buyers don’t have to pay Stamp Duty on property purchases up to £300,000, and if they purchase a property up to £500,000 they will only need to pay Stmap Duty at 5% on the portion over £300,000.
The estimated total amount of first-time relief in Q4 2019 was £154 million, the highest quarterly figure since its introduction, and a 7% increase on Q4 2018.
There has been a total of 464,700 claims since the relief’s introduction, with an estimated total relief of £1.1bn.
But Montlake suggested the first-time buyer tax perk doesn’t go far enough. He said: “The Chancellor should go one step further in the March Budget and raise the 0% limit to £500,000 for first-time buyers.
“The signs so far in 2020 are that buyers are returning to the market so we expect Stamp Duty receipts to be up noticeably in the first quarter of 2020.”
Andrew Southern, chairman of property developer Southern Grove, added: “The FTBR scheme’s effect over the past two years has been important but barely scratches the surface of the impact that the Help to Buy scheme has had.
“In the long run it is vital that both schemes are an addition to house building, not a replacement, and don’t serve as a political distraction to the fundamental mechanics of the market.”