Stamp Duty revenues fall with higher rates

I see others are now writing that Stamp Duty revenues have been adversely hit by the imposition of much higher rates, as predicted here. Official figures show Q2 2018 housing Stamp duty revenues down on a year ago, with sharp falls in transaction volumes for dearer homes following the higher tax rates. So why doesn’t the Treasury set rates that increase the revenues instead of hitting them?


  1. Anonymous
    October 20, 2018

    The People’s Vote march needs to be answered.

    46 million out of 46.5 million referendum voters did not join it.

    If they get their way then it really is mob rule.

    1. Hope
      October 20, 2018

      Your lying chancellor said he is a low tax conservative while presiding over the highest taxation in fifty years. Insurance premium tax going through the roof, all for doing the right thing. What did May say about fair to all? Your blog confirms it further. Best you get rid of him and May.

    2. Caterpillar
      October 20, 2018

      Yep, elites and mob together, a historically truly frightening combination.

    3. margaret howard
      October 20, 2018

      Neither must 17m British people be allowed to decide the future of over 65m, especially the young upon whom our future depends. The voting system is not fit for purpose and must be changed before any more damage is done to this country


      1. Edward2
        October 21, 2018

        By your maths Margaret, 49 million out of 65 million did not vote to remain in the EU.

      2. Steve
        October 21, 2018

        Margaret Howard

        ‘Neither must 17m British people be allowed to decide the future of over 65m”

        And of those who voted remain and found themselves in the voting minority – what right do they have to overturn the will of the majority voters ?

        Majority vote decides, not the minority or those who didn’t vote.

        That’s how it works.

      3. Caterpillar
        October 21, 2018


        Nearly twice as many constituencies voted to leave than remain, over 8 per cent more people voted to leave than remain (1..08 x 48 ~ 52).

        The wisdom of crowds essentially works on the binomial distribution. If there is a chance greater than a half of each individual knowing the correct answer to a question then the more people that are asked the more likely that the aggregate answer is correct. For such difficult binary questions a referendum is exactly the right approach.

        (One could argue that younger voters do not have the experience or are in a position in their lives where they are less likely to be as impartial as older voters and so should not take part in such referenda, but I think the repercussions of this, however valid, have some dangers)

        I agree there is much wrong with our general election voting system, which I do think should be changed, and this is reflected in how politicians have responded to a clear referendum result.

        1. margaret howard
          October 22, 2018

          Older voters impartial?

          In my opinion (and experience) older voters become more and more right wing. And selfish.

          ‘No fool like an old fool’ just about has it right.

          Nostalgia is a ‘disease’ of old age. Old men don’t like to lose their power to the young of the tribe.

          This referendum affected the young and their future role in European affairs which this vote has destroyed.

          EXIT BREXIT!

    4. Anonymous
      October 20, 2018

      I include abstainers in that figure. They are relevant.

    5. Peter Parsons
      October 20, 2018

      Leave means leave also had a rally today. It is reported that 1,200 turned up.

      1. Edward2
        October 21, 2018

        People who are content and have voted for something have no desire to March.
        Whereas malcontents wishing to protest against something are naturally incentivised to turn out.

        1. Peter Parsons
          October 21, 2018

          By that logic, people who voted to leave are content with the Prime Minister’s Chequers plan then.

          1. Edward2
            October 21, 2018

            That is up to Parliament to vote on.
            They have the result of the referendum to implement.

    6. Hope
      October 20, 2018

      Tax rising to fifty year high while May pisses our money away, Crime rising to epidemic levels, home ownership diminishing and May’s Betrayal of the nation over Brexit. Structural deficit still present, mass immigration continues,mhundred sir thousands of illegal migrants migrants lost to May’s system, May tries to out Windrush people legally here! Police numbers slashed, stop and search forbidden, any calls for more mine to fall on deaf ears says Rudd, pay rise for public blicmsector except police. Some record she has. Tories please get out of office, you are not up to the job, you are not trusted. Lying to say black is white does not cut the mustard. Time is up. Just go.

    7. Steve
      October 20, 2018

      I know how I’d answer it….with water cannon.

      These ‘aww it’s not fair’ minority cry babies need to get a grip of the basic concept of democratic vote.

      And when they understand the degree of suffering and blood spilled by generations in earning the right to democracy, they’ll also realise we’re not going to let them destroy it.

      It will be defended the same way it was achieved, if necessary.

      1. Stred
        October 22, 2018

        May made Boris scrap the water cannons he bought from the Germans. Blunderwoman action no 35.

        1. rose
          October 22, 2018

          And she made a coarse joke about them when she was selling herself as better than him.

    8. rose
      October 20, 2018

      So much hatred on display, and abuse of children (writing unrepeatable things on their children’s skin). Shouldn’t these people be reported to the South Yorks police force?

  2. Richard1
    October 20, 2018

    Ah the Laffer Curve again. Can there be any leftists out there who still deny it? Let’s hope the Chancellor takes the opportunity in the budget to reverse George Osborne raises in stamp duty, the resulting increased revenues can be used to sort out universal credit following Osbornes damaging cuts.

    1. Peter Parsons
      October 20, 2018

      Ah, the myth of the Laffer curve. Osbornes’s changes in stamp duty reduced the tax on all transactions under £937,000, which represent the vast majority of property sales (98% of all transactions at the time the changes were made).

      If there was a Laffer curve effect, surely reducing the tax on 98% of all transactions would deliver increased revenue rather than what has happened.

      Reply. The revenue fell owing to the fall in expensive home transactions!

  3. Mark B
    October 20, 2018

    Good evening.

    We are facing a double-whammy. Higher interest rates, which does need to happen I feel, and higher taxes. This is due to government spending in order to keep the economy, or more to the point big business, afloat.

    Socialists never lean 😉

  4. Lifelogic
    October 20, 2018

    Why indeed, well the people at the Treasury are obviously totsl idiots one assumes. What did they think that up to 15% turnover tax on houses would do? They are also hitting landlords and thus tenants by taxing ‘profits’ that are not even being made.

  5. Lifelogic
    October 20, 2018

    Also why buy an expensive house if you know the government will tax 40% of the value of it off you with IHT on death or use it to pay for your or other lifetime care need (this on top of this up to 15% SDLT)?

    Hammond has delivered the UK the highest taxes for nearly 50 years, the most idiotically complex and irrational tax system, combined with generally very poor and declining public services and rapidly rising violent crime too.

    To achieve this they employ load of overpaid and over pensioned bureaucrats and consultants doing little of much value, make loads of benefit payment to the healthy but lazy & feckless to keep then living off the backs of others. Also to ensure they next learn to work or set an example for their children.

    They they then fund completely idiotic schemes like Hinkley C, HS2, electric car and renewable subsidies. They also refuse to reform the NHS or education in any sensible way so billions is wasted there too and it remain a generally dire state monopoly. At least 50% of the taxpayer soft student loan debt will never be repaid and about 2/3 of the degrees have little or now value anyway.

    Then we have a massive jump in largely pointless jobs like tax planning, employment tribunal legal work and the likes caused by absurd red tape and Hammond’s idiotic tax complexity plus all the other red tape complexities. Moronic planning rules too and all the pointless jobs there. Even refuse collection is now totally idiotic.

    Be feckless seem to be the clear message from his tax and benefit system. Or leave the country if you have money or want to work hard.

  6. mancunius
    October 20, 2018

    JR, are you suggesting Mr Hammond’s policies are ever motivated by an attempt to increase revenue? I think not. Mr Hammond is stubborn, but not thick.
    I used to assume the higher SDT was simply a politician’s vote-catching pretence that higher SDT would curb property prices, under the pretext of allowing some BLT purchases to fall like apples into the laps of ‘deserving first-time buyers’. As we know – a most unlikely outcome.
    As Oscar Wilde said, ‘The good end happily, and the bad end unhappily – that is the meaning of fiction.’
    Of course, neither Osborne nor Hammond have any more control over the housing market than Canute had over the tide. Numerate BTL-ers avoid SDT simply by becoming companies. All higher rates of SDT do is encourage the purchase of lower-priced properties – particularly in view of slightly reduced levels of HB from which the BTL mass tend to profit. This entirely removes the first-time-buyer range of properties from the market, as BTL-buyers do not exchange their property to trade up (or down) – as do owner-occupiers – instead they hang on and buy more with the leveraged equity. So entire swaths of London (for example) remain semi-permanently off the market.
    As for the PCL market in London, the main reason why has deflated is that foreign purchasers – who also seek long-term refuges for their capital – have googled words such as ‘Corbyn’, ‘Labour Policies’. and ‘Tier 1 Investor Requirements’ (Home Office, Jan. 2018).

    For UK politicians – particularly government ministers – who have personally been purchasing green-belt land since ca. 2010, the stagnation of prices combined with a housing shortage must surely come as excellent news.

  7. Forward March!
    October 20, 2018

    No. Just been looking online at many photos of the Loser Demo today. Much greater diversity in the Tory Cabinet and in the Labour Cabinet.
    A New Era 2019 starts
    The sun has got his hat on

  8. Big Ayes
    October 20, 2018

    Hear roars of crying and the drip of Remainer tears.Don’t listen. Just watch carefully, specifically

  9. Sherlock Holmes
    October 20, 2018

    and in LONDON!!!!”

  10. Pete Else
    October 20, 2018

    “So why doesn’t the Treasury set rates that increase the revenues instead of hitting them?”
    Because thieves find it difficult not to steal as much as they possibly can?

  11. Adam
    October 20, 2018

    We have a dud Chancellor.

  12. Roy Grainger
    October 20, 2018

    It is just virtue signalling by the socialist Hammond – punish the rich.

    I see the Loser’s March was the biggest since the protests about Iraq – Alastair Campbell just ignored that one though so he shouldn’t complain when we do the same this time.

  13. Ron Olden
    October 20, 2018

    If these Stamp Duty rates really are causing a reduction in revenues they should be cut to whatever rate is optimal to maximise revenue.

    But are we sure it’s the Stamp Duty that’s caused the reduction in the number of transactions? Perhaps transactions have fallen because investing in property is no longer seen as money for nothing and the actual cost of the property itself is higher than ever.

    But if it is the Stamp Duty its’ not the only tax where a lower rate would increase revenue.

    A 20% Inheritance Tax Rate instead of 40% would near certainly increase revenues, and it’s pretty likely that cutting the 45% top rate of Income Tax to 40% would do the same.

    But there are other ways of sorting out this Stamp Duty issue.

    The reason for these high rates is that owner occupied housing and residential property investment has received grossly favourable tax treatment over the years and even direct subsidies with Right to Buy and Help to Buy.

    It has also received effectively subsidised finance from the Bank of England’s low interest rate policy.

    Savers have been receiving returns on their savings well below the rate of inflation so subsidising people who’ve been investing it in property which has been a one way bet.

    They could consider leaving the Stamp Duty rates where they are and having the seller pay half and the buyer pay half.

    If it were up to me I’d also consider cutting the rate and charging an annual 0.5% Tax paid annually, on the value of the investment property itself, but which could be used as credit against the final Capital Gains Tax liability when the property gets sold.

    It would have a number of benefits, including extracting some cash out of Non UK Resident property investors. Unless you are a UK Resident you are not liable to UK Capital Gains Tax at all.

  14. Beecee
    October 20, 2018

    Because the people at the Treasury are Economists and therefore stuck in the mud of their out-of-date, group think, algorithms.

    We could save a few billion by giving Scotland its independence, who cares in today’s world about the Union anyway? It does little for any of us.

    And my Scottish relatives agree with me!

  15. rose
    October 20, 2018

    We seem to have socialists in the Treasury. They don’t understand that taxation, especially high taxation, affects behaviour, and that in turn affects revenue.

    1. Steve
      October 21, 2018


      Well true, they won’t understand it, because being socialists they’re psyche is 100% politics of envy.

      Socialists hate the idea of anyone owning property. They also rather stupidly believe justice is best achieved by bashing the rich.

      ……then when the rich get fed up with it and leave the country, socialists cry injustice.

      They’re doing the same thing now over brexit, insisting democracy and injustice to be one and the same thing…..because their vote was in the minority.

      Unfortunately nearly all the public sector has socialist infestation, and post brexit there will need to be a thorough clean out to return these institutions to politically neutral status.

  16. Derek Henry
    October 21, 2018

    I’d like to see the actual accounting for those taxes ?

    It amazes me how we still talk and act as if we are using a single currency and not a sovereign one.

    Few people know the HUGE difference and it can only be GROUPTHINK. Why we still imprint the problems of a single currency onto a sovereign one.

    If you keep the tax rate the same the more the government spends the more tax transactions there is. Call it revenue if you like.

    All government spending pays for itself with any positive tax rate with the condition that everyone spends their income. If the government spends £100 it will collect £100 from the spending chain it creates. It’s not rocket science.

    Now add saving into the mix. The government spends £100 but in total the private sector saves £30. The budget deficit is £30 equal to the private sector surplus to the penny.

    Government borrows to balance the books and swaps £30 from the private sector into £30 worth of gilts.

    Job done.

    It’s not complicated. So it would be good jettison all the macroeconomic theory that construes the government budget constraint as an ex ante financial constraint instead of seeing it as an ex post accounting statement, with no operational relevance.

    The point being is that a deficit for the currency issuer is NEVER about borrowing, and bond sales are NEVER finance operations. If the government continued to net spend but didn’t issue debt to drain the resulting reserve add? Well the net spending would still occur. So it makes the point that the debt issuance doesn’t fund the spending but rather drains the reserves. That is, the funds that are “borrowed” by the government come from the government.

    But moreover, the interbank interest rate would drop to zero as the banks competed to lend out the excess reserves. So monetary policy would be forced to reflect that.

    These are not constraints for policy makers who understand monetary operations and reserve accounting. They become inflation issues rather than solvency issues. Solvency fears fall under “false constraints” or whatever it’s best to call them.

    The govt has no more or less capacity to spend today because there were surpluses in the past than it would have if there had have been deficits in the past. Govt net spending is limited by the available real resources in the economy left by non-government saving desires. Something we really have to start thinking about after Brexit if we have £39bn to spend.

    Reply Inflation is a real constraint on the ability to print money

    1. Edward2
      October 21, 2018

      So you think the more the State taxes us and spends, the better off we will be.
      You actually believe that.

    2. Original Richard
      October 21, 2018

      “All government spending pays for itself with any positive tax rate with the condition that everyone spends their income. If the government spends £100 it will collect £100 from the spending chain it creates. It’s not rocket science.”

      What if the £100 is spent abroad or on imported goods ?

      1. Derek Henry
        October 21, 2018

        What if the £100 is spent abroad or on imported goods ?

        Great question Richard because we live in an open economy. The ONS has these details it is called our sectoral balances. The flow of funds.

        Lets start with spent abroad.

        That’s the beauty of flexible exchange rates v’s fixed exchange rates. You have to have a buyer and a seller or the transaction won’t take place. So lets say you change £’s to Euro’s

        £ —————————> €

        Then you need someone who wants to change Euro’s to £’s

        £ <————————– €

        Which means the £'s never leave the balance sheets all that changes is the name on the account.

        Job Done.

        If we spend £100 on imported goods then exporters sell their stuff to us in £'s. So they get paid in £'s in supermarkets, car show rooms etc etc.

        So once these exporting countries recieve these £'s they have some choices.

        a) Keep them in their reserve accounts at the BOE

        b) Move them to their gilt accounts at the BOE

        c) Or move them back home and exchange them for their own currency. If they do that see the answer to question 1 above.

        The key being and the imprtant point is foreigners sterling savings are treated no differently than domestic sterling savings at the BOE.

        1. Edward2
          October 21, 2018

          You are assuming only two nations in the world.
          Given our pounds the importing company could then choose to swop to dollars and spend in America.
          Also you assume a static money supply and static world exchange rates.

          1. Derek Henry
            October 21, 2018

            Nonsense !


            Let them swap to $’s

            £ ——————————-> $

            Flexible exchange rates means you need a buyer and a seller

            £ <—————————— $

            Of course he could now spend the $'s in the US. but the new owner of the £'s could also spend them in the UK economy.

            Static nothing I only mentioned flexible 26 times Edward.

          2. Edward2
            October 22, 2018

            First I actually said that the money you talk about remaining in the UK could be spent in another country.
            This happens and it makes your pet theory invalid.
            Second you did not allow for money supply changes nor exchange rate changes in your pet theory.

      2. Derek Henry
        October 21, 2018

        For every trade there are *two* transactions. The first is the real transaction of real goods and services and they cross borders as you would expect.

        The second is the finance transaction in the opposite direction.

        In every finance transaction that happens the buyer gets to use what they want to pay for the transaction, and the seller receives what they want to receive for the transaction. Everybody has to get what they want in finance terms *or both legs of the transaction would never have happened in the first place*.

        The job of the finance sector is to match the mismatches, allow more finance transactions to complete and scrape a bit off for enabling that process.

        So you can buy UK goods and services with anything you want – bottles of wine, even Bitcoin and your friendly neighbourhood finance sector will sort it all out so the seller at the other end gets what they want.

        So if I’m in the UK and I’m an anarchist with a deep distrust of government, I will want Bitcoins. I may even charge for my stuff in Bitcoins. Then I’d use a finance invoice processor (like coinvoice) which allows buyers to pay with whatever they fancy and I’ll get Bitcoins.

        However at some point I’m going to have to pay my tax Bill and so I’ll use another payment processor to pay my tax bill with Bitcoins.

        But none of this is magic. The finance sector is just doing the exchanges in the background. If somebody pays me with dollars and I want Bitcoins, then that gets matched with somebody paying in Bitcoins and wanting dollars. And what happens in effect is the person paying with Bitcoin pays me, and the person paying me in dollars pays those wanting dollars. It’s a simple swap transaction that redirects the currency flows back into the currency area.

        Matching those flows is what moves the currency prices relative to each other until everything matches up.

        The key point is that in every transaction the buyer pays with what they want to pay with and the seller gets what they want to receive. Otherwise the transaction will never happen. So all that nonsense about the UK *needing* dollars to pay for things is rubbish. If we have Sterling we pay for things in Sterling and the exchange system matches that up. If there is no match. If liquidity dries up then the *transaction fails* and never happens.

        What that tells you is that the ‘trade deficit’ is a result of transactions that have succeeded. Therefore the other side must have wanted Sterling savings of some kind or the excess transaction would never have happened in the first place.

        Austerity, asset purchases by the ECB, negative rates, trades surpluses–are all deflationary and bullish for the currency but that’s another story.

        The key is how do we stop countries hoarding £’s at the BOE ? We need them to spend those £’s on UK good and services and not buying houses or our companies.

        Which is what Trump is trying to do.

    3. Derek Henry
      October 21, 2018

      Reply Inflation is a real constraint on the ability to print money

      Yes John of course which we need to think about it when spending £39b as I said above

      Govt net spending is limited by the available real resources in the economy. The resources and skills better be there to absorb the spending. Nurses and Doctors take years to train they don’t pop up out of the pavement.

  17. Monza 71
    October 21, 2018

    Hammond, like his recent predecessors, thinks you can just increase taxes and people will just pay up with a smile.

    Surely the Politicians and Officials in the Treasury cannot have failed to notice that increases in CGT, VED, Stamp Duty and the removal of tax relief on landlords’ mortgage interest payments have all adversely affected economic activity ?

    Yet they just carry on. In the case of stamp duty, reducing the top rates would be a complete no-brained but I suspect that Hammond is frightened of the cynical cries that will come from the Labour benches accusing him of helping the rich.

    Doing a logical and sensible thing can be explained and justified but this lot are as useless at coming up with explanations as they are at negotiating.

  18. Al
    October 21, 2018

    “Official figures show Q2 2018 housing Stamp duty revenues down on a year ago, with sharp falls in transaction volumes for dearer homes following the higher tax rates.”

    And yet the papers are blaming Brexit uncertainty, and the tax situation is not mentioned. (Then again they are also blaming Brexit uncertainty for a local development project being delayed – the fact that by 2016 it was already six years overdue is quietly not mentioned.)

  19. Newmania
    October 21, 2018

    Nothing to do with Brexit” ? Nobody is buying cars houses or your excuses.

    1. Steve
      October 21, 2018


      I have just bought a house outright, no mortgage. I bought a Jaguar recently, I’m a landlord as well. Guess what….I still work.

      Brexit did not prevent me doing any of these things. In fact brexit probably fired up a bit of extra patriotism and assisted my decision to buy the Jag.

  20. acorn
    October 21, 2018

    Stamp duty is doing exactly what the Treasury intended it to do. It has nothing to do with raising revenue.

    1. Know-Dice
      October 21, 2018

      Yep, that’s the way I see it too…

  21. Original Richard
    October 21, 2018

    “So why doesn’t the Treasury set rates that increase the revenues instead of hitting them?”

    Mr. Hammond, as a committed remainer, wants the economy to decline so that he can claim he was right that that voting Brexit would be be bad for the economy as he predicted and hence should be cancelled.

    For the Parliamentary Conservative Party to vote in Mrs. May, a committed remainer, as PM after the referendum, who then appointed Mr. Hammond as Chancellor, was akin to asking the opposition to implement an incoming government’s manifesto pledges.

  22. Rien Huizer
    October 21, 2018

    Mr Redwood, these homes cannot stay off the market forever. Stamp duties are inefficient but very easy to apply. Let’s call it efficiency for cowards. But lowering them would have as an initial result that revenue might go up (pent up supply). I would expect that after one or more years, either circumvention would occur, or reversion to normal volumes. It is the same with duties on cars. Anticipation drives up sales temporarily and once the measure is effective, revenue sinks temporarily before it goes up.

    1. Edward2
      October 21, 2018

      Your reply just confirms that high tax rates change citizen’s behaviour and revenues fall.

Comments are closed.