Receipts of stamp duty land tax (SDLT) between October and December were up 33 per cent on the previous quarter as transactions hiked.
Quarterly stamp duty statistics, published yesterday (February 3), showed residential SDLT transactions in the quarter were up 37 per cent on Q3, raising £1.8bn in tax for the Treasury.
However, this was still down on the £2.3bn raised in Q4 2019, as liable residential transactions decreased by 41 per cent, from 189,100 to 111,600, year-on-year.
Under current government policy homebuyers are given a tax break on transactions worth up to £500,000.
Rob Barnard, director of intermediaries at Masthaven, said: “The restrictions placed on the industry in Q2 2020 due to the pandemic meant a near hiatus in activity, but the stamp duty holiday appears to have achieved its intended result, with market activity accelerating and a rush of transactions late in the year.”
Craig Hall, head of broker relationships & propositions at Legal & General Mortgage Club, added: “Housing activity in the final three months of last year reached fever pitch as many people looked to complete their property purchases before the Christmas holidays.
"The ongoing Stamp Duty holiday undoubtably contributed to his uptick in demand, with the opportunity to save as much as £15,000 in tax encouraging many to press ahead.
"This week, MPs even debated the merits of extending or tapering the tax holiday and this would undoubtedly help buyers who are in the midst of their homebuying journey."
In a Petitions Committee session this week (February 1) MPs discussed a petition to extend the stamp duty holiday that had garnered more than 130,000 signatures.
Responding for the government in the session, Jesse Norman, financial secretary to the Treasury, also noted the success of the stamp duty holiday but refused to say whether the government was minded to extend the tax break.
He said: “It is important to say that the measure was designed to drive the recovery of the housing market in England and Northern Ireland—that is, to stimulate immediate momentum in the property market and thereby help to protect businesses and jobs in the sector by keeping house sales moving.
“What is clear is that, as a policy, it worked. The holiday is not the only aspect of the market that has driven sales, but it undoubtedly helped to incentivise people to move home.”
Mr Norman added: “[It] was the time-limited aspect of the measure which drove that increased demand, which is exactly why the end date of March this year was announced when the policy itself was first introduced.”
chloe.cheung@ft.com
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