Homebuyers have paid a staggering £5.5 billion in Stamp Duty Land Tax (SDLT) so far this year, a sharp 25% increase compared to the £4.4 billion paid during the same period in 2024, according to figures released by Coventry Building Society.
The surge in receipts follows the Government’s move to slash the nil-rate threshold from £250,000 to £125,000 on 1 April. The change has pushed thousands of homebuyers into higher tax brackets, resulting in significantly steeper bills for property purchases.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said the changes have left buyers facing “eye-watering” costs. “The Stamp Duty on an average-priced home has jumped to £3,274 — up from just £774 before the threshold was halved,” he said.
Buyers Hesitant, Market Slows
The spike in Stamp Duty has prompted fears over a cooling housing market, with Stinton warning that steeper transaction costs could discourage homeowners from moving.
“When moving comes with thousands in tax, it can put people off making that next step – whether it’s upsizing, downsizing, or just finding a home that better suits their life,” he said. “That kind of strain doesn’t just affect individual buyers; it can slow the market down for everyone.”
Monthly tax receipts reflect that trend. Despite higher rates, overall revenue has dipped, with SDLT takings falling from £1.3 billion in April to £918 million in May — a sign that transaction volumes may already be declining.
A Tax From Another Era?
Stinton also questioned the relevance of Stamp Duty in today’s housing climate. “It’s hard to see how a tax designed for a different era is still the best fit for today’s buyers,” he said.
He noted that Stamp Duty was originally introduced in 1694 as a temporary levy to fund war efforts — intended to last only four years. “More than 300 years later, we’re still paying it in one form or another, despite the fact the housing market has changed,” he added.
With affordability already under pressure from rising interest rates and cost-of-living challenges, experts warn that the tax burden could continue to distort buyer behaviour — and dampen activity across the property ladder.