On The Take: Could stamp duty revenue fall?

'Confusing signals' emerging from HMRC data, says Turnbull Property

There are “confusing signals” emerging from stamp duty data, notes buying agency Turnbull Property.

HMRC recently reported an 11% increase in revenues from London sales in the year to March 2016, but Turnbull and Dataloft flag up that 2016 tax revenues from prime London sales have been consistently falling below 2015 levels, month after month.

The HMRC analysis in question covered the period between 1st April 2015 and 31st March 2016, when London sales raised £3.37 billion from transactions (up by 3.9%).

That pan-London tax-take accounted for 46.7% of all property taxes in 2015/6 in England, notes the report, compared with 42.7% in 2014/15: “This meant that London’s housing market not only generated more revenue for the Treasury but also delivered a growing proportion of the national total.”

Thing is, says Turnbull, HMRC compared a period that mostly pre-dates the punitive stamp duty reforms of December 2014, with a year that fully takes them into account, making an uplift almost inevitable, especially in a high-value market.

In 2015/16, 38% of all London receipts came from the £2m+ market; in prime London, it accounted for over 75% and, while revenues were maintained, transactions fell by 17.1%.

“Transactions in prime London have fallen by over 40% since March”, adds the firm, “and the next time HMRC publishes its stamp duty data it is likely to find its takings greatly diminished”.

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Download the full report here