Official data from HM Revenue & Customs (HMRC) has revealed that the taxman’s take from stamp duty has suffered its greatest fall since the financial crisis.
The figures show that the Government collected £11.9 billion in Stamp Duty Land Tax (SDLT) during the most recent tax year, a figure which represents a 7 per cent drop on the previous year.
The decrease is the largest of its kind since the 2008/09 tax year when the financial crisis led to a fall of 10 per cent.
HMRC claim that several changes to stamp duty rules in recent years have contributed to the decrease, including the revenue collected in Wales going to the Welsh Government rather than HMRC and the introduction of relief for first-time buyers.
They claim the drop in receipts would have been 3 per cent if it had counted the revenue collected in Wales and the money it doesn’t get due to the first time buyer relief.
The relief was introduced in November 2017 and means those buying a property for less than £300,000 do not have to pay stamp duty, while those paying between £300,000 and £500,000 pay a discounted rate of 5 per cent.
George Bull, Senior Tax Partner at RSM said he estimates this has reduced the tax take by £500 million.
He said: “Until 2018/19, SDLT receipts for both residential and non-residential transactions have increased steadily since the credit crunch and economic downturn.
“Receipts are affected by several factors including property price inflation, market activity and a series of changes to the tax itself.
“HMRC estimates that, without first-time buyer’s relief and the devolution of taxes to Wales, the fall would be less than 3 per cent. But that would still be the biggest drop since the credit crunch and economic downturn of 2008/09.”