Figures from HMRC showed that the amount of stamp duty paid at the start of 2025 was lower than the £1.72bn intake in December and was the first time stamp duty generated less than £1bn since May last year.
Coventry Building Society said this tracked with the typical quiet period for the housing market, but said homebuyers still handed over a “notable sum”.
Homebuyers paid a total of £15.4bn in stamp duty last year, an 18% increase on the £13bn paid in 2024. This increase was partially due to the changing thresholds in April.
Since the start of the financial year in April to January, £12.7bn has been paid in stamp duty, up from £11.4bn over the previous corresponding period.
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said: “Stamp duty is one of those costs that really hits home because buyers have to find the money upfront – on top of their deposit and moving costs. While January is usually a quieter month for completions, it’s striking that buyers still handed over such a significant sum to the Treasury.
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“Over the past year, we’ve seen how changes to the nil-rate threshold have pushed more ordinary home purchases into paying tax. The £125,000 starting point might have made sense back in 2014, but house prices have moved on dramatically since then. As a result, many buyers are now paying stamp duty simply because property values have risen, not because they’re buying larger homes.
“If stamp duty has any chance of being considered fair and proportionate, it has to reflect today’s market. We have seen the government make sudden changes in direction on policies and this would be a welcome one. An urgent refresh of the thresholds would bring the system back in line with reality and take some of the pressure off people trying to move.”
IHT still on track for record intake
Some £537m was paid in inheritance tax (IHT) in January, down from £639m the year before. Compared to the previous month, intake was also lower than the total of £769m in December.
Since April 2025, IHT receipts have totalled £7.1bn, £100m more than the same period last year.
Although the revenue generated from IHT was slowing down, Will Hale, CEO of Key Advice and Air, said “the direction of travel remains clear”.
Hale added: “Increasing the tax take on people’s wealth at death continues to be viewed by this government as a key strategy as they seek to address the pressures facing public finances.”
Ian Dyall, head of estate planning at Evelyn Partners, said the recent monthly increases had been “fairly modest” and likely reflected the “levelling-off of house prices in the UK over the last few years”.
Dyall said: “I suspect underneath the overall figure there will be an upturn of IHT taken from UK regions outside the South East. The South East has traditionally made up the lion’s share of IHT liabilities and that will continue to be the case for a long time, given several decades of wealth creation in the region.
“But property values in and around London have levelled off in recent years, and even fallen in real terms in some areas compared to general inflation, while elsewhere in the country, house prices had seen double-digit annual increases. That could mean many families in the South West, Midlands and North of England are being dragged into the potential IHT net by the increase in their home’s value, probably without realising it.”
Dyall said a greater awareness of the tax and the steps to mitigate it could also be behind the lower intake.
