Stamp Duty Land Tax

HM Treasury written question – answered on 20th October 2014.

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Photo of Anne Main Anne Main Conservative, St Albans

To ask Mr Chancellor of the Exchequer, what research his Department has undertaken or commissioned into the effects of changes in the level of Stamp Duty Land Tax on the number of property transactions completed between 2005-06 and 2013-14.

Photo of Anne Main Anne Main Conservative, St Albans

To ask Mr Chancellor of the Exchequer, if he will commission research into the fiscal effects of raising the Stamp Duty Land Tax threshold.

Photo of David Gauke David Gauke The Financial Secretary to the Treasury

The fiscal effect of raising the Stamp Duty Land Tax threshold is likely to be a reduction in SDLT receipts as fewer property transactions will be charged SDLT. A HMRC publication for Budget 2014 (‘Direct Effects of Illustrative Tax Changes’, 19 March 2014) found that an increase in the £125,000 threshold by £5,000 would cost £35 million in its first year and £40 million subsequently.

Published research was undertaken by HMRC examining the impact of a first-time buyer’s relief that was in place between 2010 and 2012 (‘Evaluating the Impact of Stamp Duty Land Tax First Time Buyers Relief’, November 2011). It found that there was a substantial deadweight effect as many of the property transactions would have taken place anyway. The estimated increase in the number of transactions as a result of the introduction of the relief was between 0-1%.

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