Sean Randall, Partner and Stamp Duty expert
The Government’s monthly tax revenue statistics released today [Friday 22 May 2020] show the extent of the fall in property transactions during the full month of April and the possible longer-term impact to the Exchequer. In April, there were just over 38,000 completions over £40,000; less than half the number in the same month last year and in March this year.
Already, taking into account just one month of lockdown, the Stamp Duty revenue for the 12-month period ending last month has fallen by 6.32% compared to the same period last year. Our experience is that sector activity seems to be increasing, albeit from a low base, but we expect the drop in revenue for the 12-month period ending next month to be even greater. The latest figures probably capture sales pursuant to contracts exchanged pre-lockdown. If that is right, pressure will surely build on the Government for some type of Stamp Duty fix.
Heather Powell, Partner and Head of Property & Construction
Although the housing market is thawing, the process (so far) is slow. There is a lack of interest from buyers due to a lack of confidence and no ‘fire sales’ by distressed owners due to Government and Bank of England fiscal intervention.
Stamp Duty is a handbrake on the market at the best of times. Releasing it partly by introducing, for example, a temporary relief for downsizers could increase tax receipts, support the house building sector, address the UK housing shortage and boost the retail economy such as DIY outlets and furniture stores.
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