Landlords and second-home buyers are now responsible for more than half of Stamp Duty receipts in over half of English local authority areas, according to analysis of HM Revenue and Customs property tax data.

The figures highlight the growing importance of “additional dwelling” transactions including buy-to-let purchases and second homes as a fundamental source of government revenue. Since the additional property surcharge was introduced in 2016, these transactions have become an increasingly significant contributor to Stamp Duty income, even as the wider housing market has slowed in recent years.

HMRC confirms that Stamp Duty Land Tax receipts are tracked separately for higher-rate additional property purchases, and notes in its latest annual commentary that overall Stamp Duty receipts have remained relatively resilient despite higher borrowing costs, affordability pressures and a decline in transaction volumes compared with post-pandemic peaks.

Originally introduced at 3% above standard Stamp Duty rates, the additional dwelling surcharge was increased to 5% in 2024.

The measure was designed to reduce investor competition in the housing market and improve access for first-time buyers. However, HMRC data indicates it has also increased the tax contribution from landlords and second-home purchasers, particularly in areas where property values remain comparatively affordable.

Analysis of regional patterns suggests that many local authorities in the North of England and the Midlands now rely heavily on Stamp Duty generated from additional property purchases. Full breakdowns by region and transaction type are included in HMRC’s annual datasets.

Cities including Manchester, Nottingham and Wolverhampton are among those where investor-led transactions form a particularly large share of overall Stamp Duty receipts, reflecting both lower than average property prices and sustained investor demand.

Meanwhile, London and the Southeast continue to generate the highest total Stamp Duty revenues in cash terms due to significantly higher property values, even where investor activity represents a smaller proportion of overall transactions.

Policy background on the surcharge including its introduction under the Finance Act 2016 is set out in parliamentary documentation.

Industry analysis also suggests that Stamp Duty revenues have held up better than expected despite weaker market conditions and fewer transactions in parts of the housing market.

The findings come at a time when landlords are facing rising taxation, tighter mortgage lending criteria and increasing regulatory pressure across the private rented sector. Changes to reliefs, higher interest rates and evolving compliance requirements have all added to holding costs, particularly for smaller-scale investors.

Despite these pressures, buy-to-let investment continues to play a significant role in housing market activity. It’s clear that landlords and second-home buyers remain an important and growing contributor to public revenues through Stamp Duty taxation.

‍