The government lost out on more than half a billion pounds in taxes due to the stamp duty holiday, according to the latest figures.
Data from HM Revenue and Customs (HMRC) showed that overall stamp duty land tax receipts fell 16 per cent to £2.76bn in the fourth quarter of last year, compared to £3.29bn in 2019.
The £530m drop in receipts was recorded despite a 14 per cent increase in the number of transactions due to the stamp duty holiday introduced by the government to stimulate the housing market.
In July, the chancellor increased the nil rate band for stamp duty to £500,000.
Rishi Sunak is facing pressure ahead of next month’s budget to extend the tax break – which is due to end on 31 March – to maintain the UK housing market’s momentum during the final months of the pandemic.
The data published by HMRC showed that stamp duty receipts between October and December jumped 47 per cent compared to the third quarter.
Nick Leeming, chairman at estate agent chain Jackson Stops, said: “Today’s figures clearly show the positive impact the SDLT holiday has had for the property sector and the UK economy since its introduction.
“I would therefore urge the Government to consider a more gradual approach to paring back SDLT relief.
“Doing so will allow transactions to complete as planned in an orderly manner, giving buyers the security they need and ensuring the property market and other interconnected sectors of the economy don’t suffer a sharp shock during one of the most challenging and uncertain periods of the pandemic.”