Figures released by the treasury reveal that in 2016, the government collected £8.3bn in stamp duty on the purchases of residential property, reported WhatMortgage.co.uk in February 2017.
This is an increase of £1.3bn on the 2015 figure of £7bn.
From April 2015, purchases on second homes faced a 3% stamp duty surcharge. This particularly affected buy-to-let investors. The 3% stamp duty rise accounted for £1.19bn of the 2016 stamp duty revenue total.
Stamp duty is charged on all properties worth over £125,000. For houses between £125,000 and £250,000, the rate is 2%, rising to 5% for houses under £925,000. Houses under £1.5m pay 10%, and the rate is 12% for property over £1.2m.
According to the UK House Price Index, the average price of a house in the UK is over £215,000. In cheaper areas of the UK, average prices are less than this. In Wales, for example, the average house price is around £144,000. These figures mean that the majority of houses purchased are subject to stamp duty.
Some property experts believe that stamp duty can be a barrier to homeowners who want to move to more expensive properties, and could act as a deterrent for elderly people wanting to downsize.
Landlords are facing increasing costs. As well as the stamp duty increase, they can claim less tax on commercial mortgage interest payments. There are also stricter affordability rules on commercial mortgages, which make it difficult to obtain mortgages or mean they may have to pay large deposits.