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Figures released by HM Revenue & Customs (HMRC) last month revealed a record Stamp Duty Land Tax (SDLT) take of £7.7bn in the first eight months of this financial year.
The figure represents a 12 per cent increase on the same period in the previous year and comes despite a 10 per cent fall in the number of homes that were sold in the UK.
The increase appears to have been fuelled in part by a seven per cent increase in house prices over the last year, but also the implementation of a raft of changes to the SDLT regime.
New SDLT rates were introduced in December 2014, ranging from zero per cent at £125,000 to 12 per cent on homes purchased for £1.5m or more. The changes reduced the amounts payable by those purchasing properties worth less than £1m but increased payments for those purchasing properties valued above this threshold.
On top of this, April 2016 saw the introduction of a three per cent SDLT surcharge for anyone buying a second home.
Property commentator, Henry Pryor, said: “While there has been a direct impact on transactions at the top end of the market, there is as yet no evidence to support those who have been calling for the Chancellor to rethink the rates applicable to buyers of the most expensive properties.
“But estate agents estimate that more than 40 per cent of SDLT revenue comes from within the M25.
“And the number of all transactions in London was, in August, 39 per cent down on a year ago, so this will inevitably create a hole in the Chancellor’s accounts in due course.”