New financial crisis would hit SDLT revenue hardest
Stamp Duty Land Tax could be due to take a hit according to a warning from an industry watchdog.
The Office of Budget Responsibility (OBR) predicts that Treasury Receipts from the tax could fall by around £10 billion, despite an expected rise in revenue this year. Although it’s anticipated to reach over £13 billion, the OBR has warned that the predicted fall in property prices could negatively impact Treasury receipts by around 6.3%. It also mentioned the impact on the revenue should another financial crisis occur, stating that earnings from SDLT would be hit the hardest.
In 2015-16, the OBR stated that the 9,250 transactions which took place in Westminster, Kensington & Chelsea equated to only 0.8% of all sales. In terms of SDLT, however, they accounted for 14% of total receipts – a total of £1 billion.
Although revenue would drop by over 6% if prime property prices saw a 10% fall, the OBR warned that the biggest risk is posed by a new financial crisis. The watchdog stated that by 2018-19, this could lead to total Treasury receipts falling to an estimated £3 billion