The Stamp Duty surcharge for landlords and people buying second homes brought in £1.5bn for the Treasury in the final quarter of 2024, a 31% increase from the previous quarter, according to analysis of HMRC statistics by Coventry Building Society.
The sharp rise in tax receipts coincides with the Chancellor announcing an increase to the surcharge for second property purchases, from 3% to 5%, in the Autumn Budget on 30th October.
Further analysis revealed that more than 30,000 first-time buyers paid Stamp Duty last year, despite the nil-rate thresholds being temporarily extended.
First-time buyers currently pay Stamp Duty if their home costs more than £425,000, which is set to drop to £300,000 from 1st April.
The average price of a first-time buyer home in London was recorded at £444,548, meaning the Stamp Duty on an average priced first-time buyer home in the capital will shoot from £972 to £7,222 in April.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “There’s a balance the Treasury needs to strike between collecting more tax receipts and keeping the property market moving.
“Since the Autumn Budget it’s been landlords who have been squeezed harder by the taxman. But the real sting in the Stamp Duty tail is the end to the temporary thresholds in April.
“Homebuyers might not be fully aware of how much these changes will eat into their funds from April.
“This is especially true for first-time buyers in more expensive parts of the country where the steep hike to the tax bill could derail plans to buy a first home.”
