Stamp duty receipts up 22% in 2021
- Published: Tuesday 27 April, 2021
- By: Commercial Trust
Recent data released by the HMRC shows a significant rise in the number of stamp duty receipts, despite the existing holiday.
According to the data, stamp duty receipts rose to £1.2bn in March, making it the fifth biggest month since the tax was introduced 18 years ago.
Although the stamp duty holiday, which started in July last year is still in place, receipts were 22% higher compared to £928 million in March 2020.
Residential property sales hit a record high last month in the UK, as buyers and sellers attempted to complete deals before the end of the original stamp duty holiday.
The holiday was initially set to end on 31st March 2021. However, Chancellor Rishi Sunak announced an extension of the scheme, which is now available until June 2021 for properties up to a value £500,000, along with an added extension for properties with a value of £250,000 until September 2021.
HMRC reports show that there were a record-high of 180,690 transactions recorded in March, which is double the amount in comparison to March 2020.
Overall, HMRC received £8.7 billion in stamp duty in the 2020-21 tax year, despite the current stamp duty holiday being in place since July last year. As expected, this amount has fallen in comparison to the 2019-20 tax year, where the HMRC reported £11.6bn was in stamp duty.
Mortgage market ‘frenetic’
Jonathan Stinton, head of intermediary relationships at Coventry Building Society discusses the impact of the stamp duty holiday, explaining:
“These numbers are surprising, but anyone in the industry will know how frenetic it has been over the past few months.
“The original March deadline for the holiday would have driven a lot of people to get their house moves through last month.
“That has clearly boosted activity across the market as these tax receipts indicate higher value homes, second homes and rental properties have been exchanging hands.
“As the holiday has since been extended, we can probably expect to see this busy period continue for a while.
“Increased market activity is of course always good news for brokers, and we understand the need for speed when it comes to answering phones and dealing with queries.
“Processing cases swiftly means brokers can move on to the next piece of business while keeping strong relationships with both existing and new clients.”
Time is tighter than you may think
Jorden Abbs, Sales Director at Commercial Trust urges property investors not to underestimate the time available to complete a deal:
“It is evident that as the first initial stamp duty deadline approached, the rush to complete was significant.
“HMRC has reported a record high amount of transactions, which shows just how many people are taking advantage of the scheme, including landlords investing in buy to let property.
“If you want to benefit from the from the stamp duty holiday, you may think you have plenty of time. But when you factor in the average time it takes to complete on a property, once an offer is accepted, the deadline doesn’t seem too far away.
“With this in mind, you should give yourself plenty of time so you have the best possible chance of benefiting from the scheme.”
This information should not be interpreted as financial advice. Mortgage and loan rates are subject to change.