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Government nets £670m from 3% BTL stamp duty surcharge

Written by: Hannah Uttley
HM Revenue and Customs has generated £670m in stamp duty receipts from the government’s 3% levy on second homes since it was introduced on 1 April, official statistics reveal.

Quarter three data for stamp duty transactions published by HMRC showed that there were 86,400 transactions of additional properties accounting for £1.3bn in stamp duty receipts, with £670m of this attributable to the government’s controversial 3% tax premium on subsequent purchases.

However, HMRC said it remained “unsure” of the premium’s impact on the market as the amount generated from the 3% rule is not yet explicitly stated on the stamp duty return.

During Q3 this year, an estimated £2.2bn was earned by HMRC from residential transactions, 12% higher than the previous quarter and 10% more than Q3 2015.

The number of transactions liable for stamp duty with property values under £250,000 during Q3 was 12% higher than the previous quarter at 126,800 and 4% higher than Q3 of 2015. HMRC said the rise in transactions of this value was an impact of the higher rates for additional properties, which has led to second homes sold for under £125,000 becoming liable for SDLT. Since the rules were introduced, 57,500 transactions under £250,000 have been made liable for the 3% surcharge.

Transactions with a value of between £250,000 and £500,000 also jumped by 14% on Q2 to reach 80,600 but dropped by 3% compared with a year earlier, while transactions over £500,000 in value rose by 15% quarterly to 27,500, dropping by 4% year-on-year.

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