£1m+ properties

New HMRC statistics indicate higher rates of stamp duty are likely to remain




Last Friday we received the latest stamp duty statistics from HMRC for the 2016/2017 fiscal year. For a researcher it is a gold mine of information, providing data on transaction levels, the value of property sold and tax receipts by property type, price band and local authority.

In this release all eyes were on the effect of heavily taxing the top end of the market and the three per cent surcharge for additional homes.

We have been pretty adamant that, whatever the effect on the market in these two areas, there is currently little chance of cuts in these rates. The statistics continue to support this assertion as the income from these higher rates is just too valuable to the Treasury.

The three per cent surcharge is entirely responsible for year-on-year increases in total SDLT receipts from residential property. It raised £1.7bn in revenues in 2016/2017. Despite pressure on mortgaged buy-to-let investors, revenues generated by this measure have far outstripped initial expectations because overall purchases of investment properties and second homes have been much stronger than anticipated.

Stamp duty statistics – over £1m

Source: HMRC

In the market above £1m transaction levels did fall year on year by 10 per cent. The value of property transacted at this end of the market fell by more – by some 17 per cent. London was particularly affected with the value of transactions of property purchased for over £1m falling by 24 per cent.

But overall the stamp duty take at this end of the market only fell by a meagre two per cent, despite many transactions having had been rushed through in the preceding tax year and in the face of a vote to leave the EU. 

Perhaps more pertinently, those stamp duty receipts for £1m+ sales were 18 per cent higher than in 2014/15 when the major overhaul of stamp duty was introduced and 38 per cent higher than in 2013/14, the last complete year before the changes. So 1.7 per cent of all sales generated 30 per cent of all SDLT receipts from housing.

In the rarefied market over £5m+ comprising around 700 sales, the value of those sales was more affected – down 28 per cent year on year. That caused stamp duty receipts to fall by a more meaningful 12 per cent year on year. Yet the Treasury’s receipts for this thin slice of the market were still nine per cent above the 2014-15 level.

So for now it looks like high rates of stamp duty at the top end of the market are likely to remain.


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