Stamp duty receipts climb by £40m as buyers rush to beat tax change deadline

The amount of stamp duty land tax (SDLT) receipts cashed by the Government is £40m higher than last year, with experts putting the increase down to buyers rush to beat the looming tax change deadline.

In January, SDLT receipts were £848m, an increase of 4.95 per cent when compared to the same month in 2024, according to data from HM Revenue and Customs (HMRC).

A rush in activity as buyers race to beat the upcoming changes to the tax and an increased surcharge paid on second properties likely fuelled the increase, experts told The i Paper.

Buyers now have a little over five weeks until 31 March, when the nil-rate threshold – the value of property you can buy without having to pay any stamp duty – drops from £250,000 to £125,000.

This will take the SDLT tax bill on an average priced home in England from £2,028 to £4,528.

When the tax holiday, which was introduced by the Conservative government in July 2020, ends next month, the threshold for first-time buyer relief will also drop from £425,000 to £300,000.

Those buying second homes are already paying an additional 5 per cent tax when they make purchases, after a change in October’s Budget.

Jonathan Stinton, head of mortgage relations at Coventry Building Society, said: “Buying a home is about to get a lot more expensive.

“Those already in the middle of the buying process will be racing against time to beat the deadline. Those who can’t get the keys to their new house in the next five weeks need to brace themselves for a hit which could amount to thousands of pounds.”

He added: “Some buyers may even attempt to renegotiate the selling price so the seller ends up taking the hit, and some potential buyers may be forced to hold off their purchases altogether.

“The pressure of the deadline will be felt by buyers across the market, with some having to make tough financial decisions in the weeks ahead.

Since the temporary thresholds were announced in September 2022, the Treasury has collected more than £31.3bn in property tax.

Property expert Jonathan Rolande said there has “certainly” been a noticeable rush to buy to beat the deadline but “this is now subsiding”.

He said: “Government coffers will have received a welcome boost. The implementation of a 5 per cent additional property rate for investors and second homeowners, up from 3 per cent, will also have contributed significantly.

“The Government now have property tax levels at a high rate, but one which hasn’t skewed the market too much, but it is close. Any more rate rises and there will be unintended negative effects.”

David Hollingworth of L&C Mortgages said: “The reversal of the more generous stamp duty bandings and reliefs will certainly have brought some transactions forward from buyers eager to avoid the higher cost from April.

“There will inevitably a rush to get transactions over the line before the cliff edge at the end of March.

“Those that have only just started the process should plan for the higher stamp duty charge as the chances of completing before the deadline are now slim to say the least.

“That boost to activity, coupled with growing confidence as interest rates come down will no doubt have contributed to the growth in stamp duty receipts.

“The change after March will not be the difference between buying and putting on hold for most but it underlines that high house prices make stamp duty a major cost when buyers are budgeting.”