The Treasury has admitted that the stamp duty ‘take’ is expected to climb from £11.2 billion this year to £17.8 billion in 2020/21.
The figures were released after George Osborne’s Autumn Statement last week. The figures are not only based on the surcharge income, but on additional stamp duty raised as a result of the essential renovation of the system a year ago.
This is still around £2.8 billion less in stamp duty receipts than expected when the Office for Budget Responsibility had issued an evaluation for the same period back in July.
Some in the estate agency industry are disputing these figures.
Chestertons claim the 2014 stamp duty overhaul will cost the Treasury up to £750m in lost revenue just this year. The agency has claimed the new rates have impacted sales over £1.4m, has brought parts of the high end market to a standstill and is having an unintended impact in lower price brackets and developers are finding it bchallenging to fund the building of starter homes.
Chestertons chief executive, Robert Bartlett believes “By ignoring urgent industry calls to review last year’s changes to stamp duty, the Chancellor is burying his head in the sand and will likely be in for a shock when the final year’s receipts are counted and he realises how much the new regime is costing the Treasury”.
He continues “The Chancellor said his new second homes or buy to let levy on top of stamp duty would raise £1 billion for the Exchequer by 2021, but extra revenue is completely obliterated by the losses over that same period”.
, Head of Residential Consulting at BNP Paribas Real Estate, Adrian Owen thinks there may be an unintended disadvantage for those involved in the sale and construction of new-build homes, suggesting “Simply put, without investors there will be far fewer housing starts in London. Investors buy off plan, and this is essential for developers whose banking mandates require at least 30 per cent of properties to be sold before funding can be drawn down that enables them to begin construction”.
It’s also relevant to say that that roughly 60% of new homes in London are bought by investors.