Residential transactions and stamp duty land tax receipts declined in the first quarter of 2022, as fewer people bought property.

Figures from HMRC show there was a 13 per cent dip in residential transactions to 270,200 compared to Q4 and a 27 per cent decline on Q1 last year, the quarterly period after the stamp duty holiday was introduced.

Residential stamp duty land tax receipts totalled £2.56bn in Q1, a slight drop on Q4’s £2.94bn intake. However, this was a 45 per cent surge on the £1.76bn generated during the same period last year when the stamp duty relief was still active.

Overall, residential transactions and stamp duty receipts have steadily declined since the tax break was phased out but compared to the first lockdown in March 2020, there have been signs of recovery.

Liable transactions

In Q1, 70 per cent of all residential transactions were liable to pay stamp duty compared to 36 per cent of transactions during the comparative period last year. Again, this was due to the stamp duty holiday which was in place at the time.

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Compared to Q4 2021, there were seven per cent fewer liable residential transactions in Q1 2022 with a dip to 170,200.

When comparing Q1 2022 to Q1 2021, the proportion of liable residential transactions valued between £250,000 and £500,00 more than doubled from 24,100 to 72,600. Liable residential transactions above £500,000 fell 37 per cent from 54,300 to 34,300.

During Q1, there were 26 per cent fewer residential transactions liable to pay the three per cent surcharge for additional homes, known as higher rates for additional dwellings (HRAD).

This was a drop from 76,600 in Q1 2021 to 57,000 in Q1 2022. Compared to Q4 2021 there has been a fall of six per cent.

Around 58 per cent of HRAD transactions were for properties worth less than £250,000 in Q1 2022. In figures, this was a 20 per cent reduction from the 41,600 liable transactions in Q1 last year to the 33,100 transactions in Q1 this year.

Of all residential receipts in Q1, 43 per cent were from HRAD transactions with a total value of £1.1bn. Some £418m is estimated to have been generated from the three per cent additional rate.

Buyers who sell their previous main residence within 36 months are entitled to a refund of the tax and in Q1 2022, 7,200 refunds were made at a value of £119m.

A two per cent surcharge on the purchase of residential properties by non-residents was introduced on 1 April last year and this has since resulted in 10,400 transactions paying £111m.