The Government has hiked its profit forecasts for the Stamp Duty Land Tax surcharge by 81 per cent to £7bn, despite admitting being unprepared for the number of deals timed to dodge the extra tax.
Documents published as part of the Autumn Statement say the 3 per cent surcharge on buy-to-let and additional properties was expected to raise £3.8bn from 2016-17 to 2020-2021.
The documents say: “The measure came into effect on 1 April 2016, providing a four month window from announcement for buyers to bring forward transactions and avoid the surcharge.
“We did consider this behaviour when scrutinising the original costing but it seems likely we underestimated its size.”
Despite this, the Treasury has still collected more tax than expected and so has increased its expected surcharge tax take by 81 per cent to £6.9bn.
However, the Treasury says its original prediction was uncertain due to “low quality data and the potential for a large behavioural effect”.
It adds that its updated total bill predictions are still uncertain as taxpayers can get a refund within three years of selling their main residence and this might skew the figures.
The surcharge was announced in November 2015.