First time buyers: stamp duty holiday cost government £125m in Sheffield
The stamp duty holiday cost the Government £125m in Sheffield and Yorkshire, figures reveal.
The holiday was introduced in July 2020, forming one part of the Government’s package of interventions on England’s housing market, designed to ensure the market boomed and support an otherwise struggling economy. It has gone on to have a profound effect on the market.
Yorkshire and the Humber was in the top three regions for biggest losses, with figures for residential receipts showing revenue at £310,000,000 in 2019-20 and falling to £185,000,000 in 2020-21, when the holiday was introduced. That is a loss of £125,000,000 or -40.3%.
Research by the estate agent comparison site GetAgent.co.uk shows there were 996,000 residential transactions in England in the financial year 2019-20. In 2020-21, while the holiday was in full swing, this increased marginally to one million transactions - a 0.4% uplift.
However, despite this increase, the amount of money the Government collected through stamp duty declined significantly as a result of the holiday.
In 2019-20, the Government collected almost £8.4 billion through stamp duty. In 2020-21, it collected just under £6 billion, a revenue loss of £2.4 billion.
The biggest regional losses in percentage terms were in the West Midlands at -42.5%, the East Midlands at -42.4% and Yorkshire and the Humber at -40.3%.
Despite seeing the smallest year on year decline at -20.5%, the Government endured the largest monetary losses in London with a £675m year on year decline in the level of stamp duty paid.
Despite these government losses, a housing market boom has meant the overall value of England’s housing market increasing in the last financial year. In 2019-20, the combined value of England’s homes was £297 billion. By the following year, this had increased by 13.3% to a total of £337 billion.
The largest increase was in the South East where the value of residential property increased by 20%, with the East at 18.2% and South West at 16.9% also experiencing above average growth.
Founder and chief executive officer of GetAgent.co.uk Colby Short said: “The stamp duty holiday has done exactly what the Government intended it to. It has caused a surge in market activity, pushing up prices and propping up the economy during a very difficult and unpredictable time.
“Of course, depending on what you class as success, the jury is still out. Not only has the Government lost a considerable sum in tax, a loss we are sure to stomach via alternative tax increases somewhere down the line, but the cost of buying a home is now considerably higher than it was just a year ago.
“All signs suggest they’re only going to climb further in the coming months as demand continues to outstrip supply. A fact that the Government surely predicted given the numerous other demand focussed initiatives they’ve introduced with the same outcome.”
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