HMRC tax windfall follows new stamp duty surcharge

Stamp duty statistics show that the introduction of a two per cent surcharge on residential properties by overseas buyers, means HM Treasury has recouped millions.

Some 8,500 transactions have raked in £86m for the Treasury in the first year of the new rules being in play.

Karen Noye, mortgage expert at wealth management company Quilter, says: “With many central London properties laying empty as a result of overseas buyers purchasing prime real estate as an investment, the tax was introduced to try and make it a fairer market for Londoners often priced out.

“Clearly in its first full year in force there remains interest in property from overseas buyers even despite the global pandemic and the restrictions on travel. 

“With the UK being one of the first countries to emerge from the pandemic London property may soon become attractive again if overseas buyers can stomach the additional tax. 

“However, with house prices remaining very high it may be one step too far for this type of investor for the time being.”

Across the whole market the total SDLT transactions in Q4 2021 (October to December) were 10 per cent lower than in Q3 2021, but a total of 13 per cent lower than in Q4 2020.

These falls in the last two quarters were preceded by four quarters of growth as a result of the frenzied market during the stamp duty holiday. 

The latest figures paint a picture of a housing market that is slowly getting back to some sort of normality. 

Noye concludes: With interest rates on the rise and a cost of living crisis looming it’s likely that some of the wind is coming out of the housing market’s sails and prices may start to deflate after intense double digit growth.”