HMRC data shows Stamp Duty Land Tax (SDLT) receipts rose 24% to £14.9 billion in the year to the end of September.
This is up from £12.0 billion the year before.
The increase has been analysed by property sector financial services provider Somo, whose chief executive Louis Alexander says: “Landlords and investors are now contributing far more to stamp duty than before. With another Budget only weeks away, there is real uncertainty about what comes next.
“If the Chancellor refuses to cut or freeze SDLT, she risks paralysing investment. Smaller developers could be left reliant on short-term finance to survive, while landlords face collapsing yields.”
“The sharp rise in receipts comes just weeks ahead of the Autumn Budget, where speculation over property tax reform – including the possible replacement of SDLT – is expected to intensify.”
It was mooted last month that that the government was considering replacing stamp duty with a new national property tax – charged annually on homes worth over £500,000, rather than paid upfront at purchase.
There was also speculation over a possible ‘mansion tax’ – ending capital gains exemptions on the sale of high-value properties, which would leave investors facing large tax bills when disposing of assets.
This came on top of yet another possible tax change – National Insurance on landlords, taxing “passive” rental income as if it were earned from employment.
Alexander continues: “While still only proposals, these ideas have already fuelled nervousness in the market. For landlords, sudden changes to the tax system can alter deal economics overnight – making access to fast, flexible finance, essential.”
Coventry Building Society head of mortgage relations Jonathan Stinton adds: “Buyers and sellers are being left in tax purgatory by the Treasury’s refusal to confirm or deny rumours of changes to stamp duty.
“ … Transactions could start to dwindle as some buyers choose to hold fire, and we may start to see tax receipts start to lose momentum as a result.”
This article is taken from Landlord Today