Ahead of the Budget, there has been much discussion about taxes including stamp duty. Stamp duty has been an increasing source of revenue for the government: in the last financial year equal to £10.4 billion compared with £3.4bn in 2010 (admittedly a low year due to Global Financial Crisis).
There is no doubt that stamp duty could be improved; it hampers mobility and therefore employment and has consequences for economic growth. Whether the Treasury has capacity to change this in the coming Budget has been widely mooted. The impact stamp duty has on the market is clear: we often see the impact on transactions like the surge in first-time-buyers ahead of the changes to stamp duty in March.
It has become more problematic in expensive regions like London and the South East where more properties fall into higher tax bands (London alone counts for 39% of tax receipts). The increase in revenue drawn from this tax over the last few years has been from the implementation of the Higher Rate Additional Dwelling for second homes including buy-to-let. This additional rate was implemented in 2016 (at 3%) and increased further in the October 2024 Budget (to 5%).
The Higher Rate additional tax in the last financial year was £4.9billion and represented 47% of the tax take. Source: Dataloft by PriceHubble, HMRC