Stamp Duty Revenue Statistics 23-24

The government has published a fresh report on Stamp Taxes, including changes for Stamp Duty Land Tax (SDTL), which is the tax you’re subject to pay on transactions pertaining to land as the purchaser, for example those buying a new home or property.

This piece looks at the key changes for SDLT, recent trends, and how tax law can impact your transactions. 2023 – 2024 saw a 23% fall in stamp tax receipts due to a decrease in transactions as well as policy changes. The following analysis of official government statistics will help you to understand how the current state of stamp duty revenue affects you, and point you in the right direction for further legal guidance.

Overall Stamp Duty Revenue Trends

We’ve already touched on the decrease in stamp tax receipts, from £19,130 million in 2022 – 2023, to £14,815 million in the most recent tax year. The policy impacting this drop is the change in the nil-rate threshold of SDLT as well as the nil-rate threshold paid by first time buyers.

• The increase in the threshold meant that those purchasing a home worth below £250,000 did not have to pay SDLT from September 2022.
• Therefore only half of the 2022 – 2023 period was impacted in comparison to the full 2023 – 2024 tax year.

The reduction in SDLT accounts for a big dip in stamp duty revenue, the decrease in solely SDLT receipts, as opposed to total stamp tax receipts, year on year is 24%.

The goal of the government when increasing SDLT on residential property was to dissuade existing property owners from purchasing second homes or buy to let properties to create a fairer market for main home and first time buyers. The policy also saw companies that are buying dwellings for over £500,000, that aren’t intended for commercial use, to pay the highest SDLT rate. It can be off-putting seeing this legislation introduced when you’re looking to expand into the property market with a second home. Cannon Chambers can provide you with valuable advice around the circumstances that might mitigate the higher rates for second properties, and any further SDLT support you may need.

Residential vs. Non-Residential SDLT Analysis

Depending on the property you’re looking to purchase, it will define which category you fall into, be it residential or non-residential. Looking at the trends of each purchase type in the Stamp Tax report, there are clear differences.

• Residential SDLT receipts dropped by 27% year on year, from £11,720 million to £8,570 million
• Residential transactions saw an 18% decrease.

The combination of these statistics show us that not only were there fewer homes purchased year on year, but the value of those homes was lower or subject to first time buyer tax reliefs which resulted in a stamp duty revenue drop in the residential sector.

Taking a closer look at non-residential SDLT, the tax receipts dropped by 16% from £3,640 million to £3,045 million year on year, while transactions fell by just 3% suggesting a steadier market than that of residential purchases, yet again a lower value in the transaction deals.

Regional SDLT Distribution

England is the largest generator of SDLT receipts, taking 99% of the share and leaving just 1% to Northern Ireland signalling a far smaller property market. Both Scotland & Wales aren’t subject to SDLT charges as they were devolved in both nations, now they have their own land taxes. Unsurprisingly, London is the largest regional contributor, accounting for 39% of SDLT receipts. Despite it being the biggest source of tax, London still saw a 19% year on year decrease.

Taking a residential vs non-residential view on these stats, all regions saw residential drops with the East of England being hit the hardest, falling by 33%. Again, non-residential SDLT receipts remained more stable with transactions decreasing by just 3%, however receipts have had a more dramatic decline, with the South East seeing a 31% fall. This might suggest a slowing in the commercial property market, down to various factors including the societal shift to how commercial spaces are used as well as the complexity of the interest rates. Cannon Chambers can provide in depth legal advice surrounding stamp duty to those looking at making a non residential property purchase.

Higher Rate on Additional Dwellings Analysis

Higher Rates on Additional Dwellings (HRAD) is the additional charge incurred when people buy a second home or investment property, in short anywhere that isn’t their main residence. The report shows: that

• HRAD transactions and receipts were both down by 20% year on year, outlining a slight push on the breaks in activity from property investors, likely due to higher mortgage rates and tighter regulations.
• HRAD makes up 22% of residential transactions, yet a large 53% of receipts. This is due to the surcharge of the HRAD that gets added onto the SDLT. In October 2024, the HRAD rate was increased from 3% to 5%.

The distribution of additional dwellings follows a different trend to main rate residential transactions, with purchasers either buying in lower value properties with a buy to let intent, or high end luxury properties for a second home or investment purpose. This creates a U-shape distribution to reflect the differing types of property that investors tend to go after. Cannon Chambers can provide you with a closer insight into tax regulations to be aware of and some basic considerations when looking to invest in UK property.

First-Time Buyers Relief Impact

First Time Buyers Relief (FTBR) is a reduction on SDLT for those purchasing their first home in England or Northern Ireland.

• There’s been a dramatic drop in FTBR, down 44% year on year
• Tax relief fell by £167 million. The reduced activity from first time buyers is thought to be down to increasing mortgage rates, and a hard market.
• The policy change made in September 2022 meaning purchasers acquiring a property valued below £250,000 pay zero SDLT also accounts for the significant drop in FTBR being used.

House buyers in London and South East accounted for 59% of FTBR, a total of £320 million. This points towards the higher house prices across those regions. Purchasers are more inclined to meet the threshold where SDLT is unavoidable so FTBR is called upon.

Non-Resident Surcharge Effects

Non Resident Stamp Duty Land Tax (NRSDLT) is an additional 2% surcharge applied to non-UK residents when purchasing residential properties in England and Northern Ireland.

• £245 million extra SDLT was generated in 2023 – 2024 due to the NRSDLT, but this was a 12% drop year on year. The total is weighted towards London and the South East by 80%, a clear pointer that these regions are on the high priority list for non-UK property buyers.
• A total of 18,500 transactions were subject to the NRSDLT in the last tax year, while there was a decrease there is still a clear demand for property across England and Northern Ireland from overseas investors.

Future Outlook and Policy Changes

The report published by the government showed decreases across the board year on year. The implications of increased HRAD as well as the increase in SDLT threshold for residential property buyers and first time buyers have caused a rift in stamp duty revenue generated by stamp duty. From April 2025, the SDLT threshold increases to £125,000, so we’d expect to see an increase year on year in the 2024 – 2025 report despite the outcome for transactions.

Residential and commercial property continues to be a target for tax changes. The members of Cannon Chambers are experts in tax law and ready to give you the stamp duty advice you need to make your next property purchase both profitable and efficient. Have your queries answered with a multitude of advice and support, get in touch today.