Real Estate Residential

Q1 2017 records a drop in stamp duty receipts compared with previous year

HM Revenue & Customers have recorded a drop in stamp duty receipts during the first quarter of 2017 when compared to the same period in 2016.

The residential property sales which are provisionally non-seasonally adjusted, show that during Q1 2017, there are have been 195,000 liable and 48,900 non-liable transactions. The liable transaction figures is 5% lower than the same point in 2016 with the total recorded for the financial year being 1% higher than recorded in the previous year.

In 2017, the number of liable transactions involving properties worth less than £250,000 is around the same as the same time in 2016. However, for the 2016-17 financial year, there has been a 4% increase in the number of transactions compared with the previous financial year.

There was also a drop in the number of liable transactions that had a value of more than £500,000 during Q1 2017. There was a drop of 14% when compared to the same time last year and while financially, the total amount of transactions had reduced by 3% when compared with 2015-16.

During Q1 2016, the number of liable transactions were remarkably high and this was down to the fact that many buyers were trying to purchase property before the 3% rise in stamp duty on additional properties came into effect.

When it comes to non-liable transactions during the first quarter of 2017, there was a 39% drop when compared to the same quarter in 2016, with the total amount of non-liable transactions being 31% lower than the previous financial year.

In Q1 2017, it has been estimated that the stamp duty receipts will amount to £1,995 million from transactions involving residential property along with stamp duty receipts amounting to £789 for transactions involving non-residential property. The figure for residential transactions is 16% higher than that seen in the first quarter of 2016 with the receipts for 2016-17 being 17% higher than the previous financial year.

It is no real surprise that transactions involving residential properties that are liable for stamp duty are down in 2017 when compared to 2016. The additional tax on second properties saw an increase in transactions as investors attempted to make purchases before the changes were brought in.

Despite this, at the more expensive end of the market, the land tax reforms have hit hard. The number of liable transactions involving properties valued under £250,000 has not changed compared with 2016 but there has been a drop in transactions on properties worth more than £500,000. For a property market to continue to perform in a healthy way movement has to occur throughout all levels but the changes have hit the high-end of the market.

The slowdown in transactions at the upper end of the market is not great news although there is a glimmer of hope for potential buyers and investors. As high-end property has slowed down, it has helped to make properties more affordable in this section of the market and that is certainly something that is worth holding on to.

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