The government’s public finances have been impacted by the slowing housing market. According to data released by HM Revenues & Customs, land and property stamp taxes declined in 2018 for the first time in a decade by 7%. Part of the decline is being blamed on the relief offered to first time buyers and the devolution of stamp taxes to Wales. Yet, the HMRC reported that receipts would have declined by nearly 3% despite the changes.

There had been stamp duty changes made that were considered controversial and negative to the housing market. Those changes included a higher tax rate for costlier homes which was thought to drive away top buyers from the London housing market, as well as wealthy home buyers and investors overall. There was also a surcharge levied against home buyers purchasing their second home. Penalizing those willing to buy in the uncertainty of Brexit was thought to be counterproductive to supporting the housing market.

Back in 2014, when the reforms to the stamp duty were introduced, projected revenues on residential transactions were thought to rise to £16bn by 2019. In the tax year to April 2019, reported revenue for residential stamp tax amounted to a decline for that time period of 10% to £8.4bn. Revenues for commercial property dropped 2% to £3.6bn.

The first five months of the current fiscal year experienced a 5.9% decline in stamp duty receipts according to the Office for Budget Responsibility. 

Brexit could hinder the revenues recovering and cause a greater shortfall. The housing market has been reported to have experienced a decline in the overall UK house price as the market cools down. Home buyers, landlords, and investors have become more cautious as the 31 October Brexit deadline nears.