Homes costing more than £1m accounted for more than a third of the £7.3bn paid in stamp duty last year, after reforms increased the tax on expensive properties.
Although they made up only 1.6 per cent of all housing transactions, £1m-plus homes generated £2.6bn in stamp duty, or 36 per cent of the total, for the public purse in 2015-16.
This was a 19 per cent rise from last year, despite concerns that the higher stamp duty rates on more expensive homes introduced in December 2014 would slow the market.
“There was a lot of speculation that the stamp duty take over £1m would have fallen because of the changes. It will be frustrating that this hasn’t been the case for those arguing the top end of the market has become too heavily taxed,” said Lucian Cook, director of residential research at Savills.
The figures for England, Wales and Northern Ireland were published on Friday by HM Revenue & Customs and are the first to reflect a full year after reforms made by the former chancellor George Osborne.
The changes cut costs for most, except for those buying properties for more than £937,000. They have also increased the share paid by London, where receipts were up by 11 per cent to £3.4bn, while those from every other region fell.
“The increase in stamp duty receipts shows how important the London market has been to the Treasury, given that the capital now generates 46 per cent of stamp duty receipts from residential property,” Mr Cook said.
Two boroughs — Westminster and Kensington & Chelsea — each accounted for 7 per cent of revenues, and the highest average stamp duty on a residential purchase was in Westminster at £136,500.
Kensington and Chelsea’s contribution, at £514m, was higher than the total from the east and West Midlands combined.
The increase in stamp duty take from expensive properties comes despite house prices falls in London’s wealthiest areas.
Agents and developers blame the stamp duty reforms — as an example, the charge on a £2m home has gone from £100,000 to £153,750 — and some have called for adjustments to reduce the bill for buyers. But there was little noticeable change in transaction numbers in 2015-16 from a year earlier; about 11,000 homes costing £1m to £2m changed hands during the year, up from 10,000.
However, an additional stamp duty charge amounting to an extra 3 per cent of the purchase price was applied to second and additional homes from April this year. Mr Cook said the effects of this change had not yet fed through to the data.
“We have seen a more noticeable impact on high-value transactions since these changes were compounded by the additional 3 per cent duty … and the uncertainty around Brexit. That means these figures don’t give the whole picture,” he said.
Berkeley Homes, which specialises in building expensive properties, has been especially vocal in seeking changes to the stamp duty system. It said this month that “transaction taxes were now too high, and this was restricting both mobility in the second-hand market and the pace of supply and delivery of new homes in London and the south-east”.
Overall, stamp duty receipts from home sales were down 2.5 per cent to £7.3bn, but the decline was mainly because Scotland no longer figures in the statistics after stamp duty was devolved to Holyrood. Like-for-like receipts were up about 1 per cent.
