Stamp duty revenues increased substantially in the past financial year as activity returned to the housing market following two years of subdued dealmaking.
New figures from HMRC show residential stamp duty land tax receipts rising from £8.57 billion in 2023-24 to £10.38 billion in 2024-25, a jump of 21%.
The number of residential transactions also climbed, up 20% from 872,000 to 1.05 million. The rebound comes despite broadly flat house prices over the same period, pointing to a market where volume has recovered rather than values.
Non-residential activity strengthened too. Commercial SDLT receipts rose 15% year on year to £3.51 billion, with transactions increasing from 105,000 to 112,400.
BROAD-BASED RECOVERY
HMRC’s data suggests a broad-based recovery, supported by easing mortgage rates and a lift in business confidence. However, industry figures warn that the tax burden has become an increasing part of the story.
Ian Futcher, financial planner at Quilter, said: “The latest stamp duty figures show a market that has remained relatively resilient in terms of transaction numbers, but one where the tax burden on buyers continues to grow.
“Residential SDLT receipts rose by 21% over the year, despite house prices being broadly flat.
“Therefore this isn’t a story of booming values but of a system that has become increasingly punitive, with higher surcharges and tighter reliefs pushing up the cost of moving.”
FIRST-TIME BUYERS
Futcher highlighted the strain on first-time buyers navigating the shifting tax landscape. Claims for First Time Buyers’ Relief rose 37% before thresholds tightened in April, saving buyers an average of around £5,000.
He added: “However, mortgage rates have since fallen from the levels seen in late 2024 and early 2025.
“For those who made a knee-jerk decision to purchase under the old rules, the upfront tax saving may now be overshadowed by the fact they locked into borrowing when rates were materially higher. In some cases, the additional annual interest cost could quickly erode, or even exceed, the saving they secured, meaning the timing of the purchase may not ultimately have delivered the benefit they hoped for.”
LANDLORD PRESSURE
The data also underline the mounting pressure on landlords and second-home buyers. Receipts from the higher rates on additional dwellings increased by almost one fifth after the surcharge rose from 3% to 5%, taking total revenue to more than £5.4 billion.
Futcher said: “For many investors, the tax landscape is now so onerous that the financial rationale for purchasing a property has weakened considerably, contributing to sluggish turnover in parts of the country.
“For anyone considering a move, these figures highlight the importance of viewing stamp duty as a central part of affordability rather than an afterthought. With surcharges higher, reliefs tighter and mortgage rates still elevated by historic standards, buyers need a clear understanding of both the upfront tax costs and the longer-term mortgage implications before committing.
“The housing market has held up better than some expected, but it has done so in spite of the tax environment, not because of it, and thoughtful planning has never been more important.”
