The upcoming stamp duty changes could raise an additional £1.1bn a year for the Government, according to new estimates from Zoopla.

Analysis by the property portal revealed that the cost of buying a home will increase for the majority of home buyers in England and Northern Ireland from April, when the stamp duty land tax (SDLT) relief introduced in the 2022 mini-Budget ends and reverts to previous rates.

From 1 April, four in every five (83%) homeowners will pay stamp duty on buying a main residence, up from 49% today, as the 2% rate between £125,000 and £250,000 returns. Less than a fifth of homeowners (17%) will pay no stamp duty on purchases below £125,000.

Zoopla has estimated that this would mean the 49% of homeowner purchases over £250,000 will pay an extra £2,500 in stamp duty from April. The 33% of buyers purchasing between £125,000 and £250,000 will pay 2% on the purchase price up to a maximum of £2,500, and Zoopla has projected that in total, this will generate an additional £900m in stamp duty.

The property portal has also forecast an additional £200m to be generated in stamp duty from the impact to first-time buyers.

The proportion of first-time buyers liable to pay stamp duty will double to 42% from April, hitting London and South East buyers in the £300,000 and £625,000 range the hardest, with costs of up to £15,000 per purchase.

According to the estimates, buying at £350,000 will cost £2,500 per purchase, up from £0 today, while buying a £500,000 home will cost £10,000 in stamp duty, up from £3,750 today, and buying at £550,000 will jump from £6,250 to £15,000.

Executive director at Zoopla, Richard Donnell, commented: “Stamp duty has become a big source of tax revenue, approaching £10bn a year for the Government. The reduction in tax reliefs from April will see more home buyers paying stamp duty.

“It’s positive that most first-time buyers will still pay no stamp duty from April, but these changes hit those buying over £300,000 in southern England the most where buying costs are already high. This will reduce buying power and market activity at a local level.

“Stamp duty is a big tax on home movers in southern England where affordability problems are already a major challenge. The case for reforming stamp duty remains but the question is where to replace the multi-billion in annual tax revenues.”

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