The controversial decision to hike Stamp Duty for landlords and second home owners is squeezing more money from the sector than had been expected.
The increased taxes have raised an additional £1.4billion in revenue in this financial year alone, around twice the figure the Treasury was anticipating when it initially announced that it intended to increase rates paid by the nation’s property investors.
The changes, which placed a three per cent surcharge on the Stamp Duty paid on any property which was not an individual’s main residence, took effect in April 2016.
In the months leading up to the changes being introduced, there was a rush of buyers trying to complete transactions ahead of the start date.
But despite the attempts by many investors to avoid the charge, the sums flowing into the Government’s coffers have still exceeded expectations.
Analysts from the Office for Budget Responsibility (OBR) had previously projected that around £700million would be collected in 2016/17.
If the trend continues, the tax would bring in £8.6billion within the first five years, almost twice the amount originally predicted.
While the changes were introduced by former Chancellor George Osborne, his predecessor Philip Hammond has himself faced criticism for failing to review Stamp Duty in last week’s Budget speech.
Critics have argued that the tax remains fundamentally unfair and while much of the emphasis has been on the undoubted burden on second-time buyers and investors, rising property prices also mean that a growing number of first-time house hunters are also being hit in the pocket.
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