House prices are soaring as buyers rush to secure homes before April’s tax changes. However, stamp duty land tax (SDLT) revenue has plummeted, particularly in residential property sales.
Residential SDLT receipts dropped by 27%, from £11.72bn in 2022/23 to £8.57bn in 2023/24. Transaction numbers also fell sharply, from over 1m to 872,000. Overall, SDLT revenue – including non-residential – dropped by £3.7bn, a 24% fall year on year.
HMRC attributes the decline to reduced transactions and policy shifts, compounded by higher mortgage rates following the September 2022 mini-Budget. Non-residential SDLT receipts also fell, declining by 16% to £3bn, despite a modest 3% drop in transactions.
London accounted for 39% of SDLT receipts (£4.5bn), though this was 19% lower than the previous year. The east of England saw the steepest decline in residential receipts, down 33%, while Northern Ireland fell by 21%.
High-value properties dominated SDLT contributions: purchases over £1m represented just 4% of transactions but 52% of the tax take. Conversely, half of the receipts came from properties priced at £250,000 or less, contributing only 8% of total revenue.
First-time buyer relief usage also dropped significantly, with 113,100 claims worth £540m in 2023/24, compared to 200,000 claims totalling £708m the previous year. The government noted many first-time buyers fall below the £250,000 threshold, eliminating the need for relief.
With further tax changes on the horizon, the future of SDLT revenue remains uncertain.
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