Landlords and second-home buyers driving majority of Stamp Duty revenues

| Marc da Silva

Analysis by Paragon Bank of government data shows that second-home and buy-to-let purchases now account for the majority of Stamp Duty receipts in more than half of English local authorities.

In the 2024/25 financial year, higher-rate additional dwelling (HRAD) transactions generated at least 50% of Stamp Duty receipts in 164 councils across England, up from 62 authorities in 2016/17, when the surcharge was first introduced. That represents an increase from 22% to 56% of English councils over the period.

The figures point to a growing reliance on additional-property purchases within the Stamp Duty tax base.

According to the analysis, many of the areas most dependent on HRAD receipts are large urban authorities rather than traditional second-home markets, suggesting much of the activity is linked to buy-to-let investment.

In around 8% of local authorities, additional-property purchases now account for at least three-quarters of Stamp Duty income. In Kingston upon Hull, HRAD transactions represented 97% of Stamp Duty receipts, while the figure reached 92% in Sandwell.

Authorities including Manchester, Salford and Wolverhampton now derive at least three-quarters of their Stamp Duty receipts from additional-property transactions.

Local authority
HRAD share of receipts (2024/25)
HRAD share of receipts (2016/17)
Kingston upon Hull, City of
97%
68%
Sandwell
92%
63%
Blackpool
92%
79%
Hyndburn
89%
69%
Barking and Dagenham
89%
56%
Stoke-on-Trent
85%
61%
Burnley
82%
65%
Leicester
82%
59%
Wolverhampton
81%
56%
Lincoln
81%
63%
Middlesbrough
80%
53%
Nottingham
80%
61%
Salford
80%
49%
Luton
80%
52%
Manchester
79%
52%
Regionally, 93% of local authorities in Yorkshire and the Humber generate at least half of Stamp Duty receipts from HRAD transactions, with 92% of local authorities in the North East and 89% in the North West.
The proportion was much lower in the south of England, with 33% of local authorities in the East of England generating 50%+ stamp duty revenues from HRAD purchases and 34% in the South East.
Region
LAs HRAD share of receipts 50%+
% of LAs 50%+
Yorkshire and the Humber
14
93%
North East
11
92%
North West
31
89%
East Midlands
16
67%
London
20
61%
South West
15
58%
West Midlands
13
43%
South East
22
34%
East of England
15
33%
A 3% Stamp Duty surcharge was introduced in April 2016 to cool buy‑to‑let and second‑home demand, extended to 5% in the 2024 Autumn Budget. While transaction volumes have softened in some markets, the receipts data suggests the policy has also increased reliance on higher‑rate purchases as a source of stamp duty revenue.
Louisa Sedgwick, Paragon Bank MD of Mortgages, said: “The Stamp Duty surcharge was designed to moderate buy‑to‑let and second‑home demand, but the longer‑term effect has been to entrench additional‑property purchases as a core source of Stamp Duty revenue. A decade on, the receipts data points to a more complicated outcome. In many parts of England, these transactions now account for a much larger share of Stamp Duty revenues than they did at the outset.
“The figures suggest that additional-property purchases have become an increasingly important component of the Stamp Duty tax base, but there is only so far that landlords can go. They have already been hit with an increase to the surcharge in 2024 and the impact of the policy has been to pivot transactions to northern regions, where property is typically cheaper. The danger moving forward is that we create a two-tier market, with uneven investment across the country, particularly in the south, which could lead to stock shortages and rental inflation.”

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