Figures from Paragon Bank, which analysed government data on stamp duty received in the 2024/25 financial year, found that these transactions, which attract a higher rate of duty, generated over half of all stamp duty in 56% of local authorities – 164 in total. That figure was up from 62 in 2016, when the higher rate of stamp duty – the Higher Rate for Additional Dwellings (HRAD) – was introduced.
This higher rate of duty has since become a core source of revenue for the government.
Louisa Sedgwick, Paragon Bank’s managing director of mortgages, said: “The stamp duty surcharge was designed to moderate buy‑to‑let and second‑home demand, but the longer‑term effect has been to entrench additional‑property purchases as a core source of stamp duty revenue. A decade on, the receipts data points to a more complicated outcome. In many parts of England, these transactions now account for a much larger share of stamp duty revenues than they did at the outset.
“The figures suggest that additional-property purchases have become an increasingly important component of the stamp duty tax base, but there is only so far that landlords can go.”
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Regional discrepancies
Many of the councils where BTL and second‑home purchases account for the highest proportion of stamp duty receipts are not traditional holiday or second‑home hotspots but instead large urban authorities in the Midlands and North, suggesting the transactions are driven by BTL purchases.
In 8% of local authorities, additional property purchases now account for three-quarters of total stamp duty receipts. HRAD transactions accounted for 97% of total stamp duty receipts in Kingston upon Hull and 92% in Sandwell in the West Midlands.
Locations including Manchester, Salford and Wolverhampton now derive three‑quarters or more of their stamp duty receipts from additional‑property purchases.
Regionally, 93% of local authorities in Yorkshire and the Humber generate at least half of stamp duty receipts from HRAD transactions, with 92% of local authorities in the North East and 89% in the North West.
The proportion was much lower in the South of England, with 33% of local authorities in the East of England generating 50%-plus stamp duty revenues from HRAD purchases and 34% in the South East.
Sedgwick said this showed that one major impact of the HRAD has been to shift BTL activity to cheaper Northern regions.
“The danger moving forward is that we create a two-tier market, with uneven investment across the country, particularly in the South, which could lead to stock shortages and rental inflation,” she added.
