Stamp Duty receipts jumped 14% to £9.8bn for the six months to September, providing Chancellor Rachel Reeves with food for thought as she prepares for her Budget on 26 November.

The £1.2bn windfall could help ease pressure as Reeves seeks to raise around £22bn to plug what she has called a “black hole” in the public finances. On the other hand, with Stamp Duty forecast to bring in £24.5bn by 2029-30, the strong performance highlights the tax’s revenue-generating potential.

The jump follows the tax’s thresholds being reset to September 2022 levels in April, reversing increases introduced by Liz Truss in her infamous mini-Budget. HMRC says its house price rises and increased transactions that account for the increase.

Buyers and sellers are being left in tax purgatory by the Treasury’s refusal to confirm or deny rumours of changes to Stamp Duty.”

Jonathan Stinton, Coventry Building Society‘s Head of Mortgage Relations, told Mortgage Finance Gazette: “Buyers and sellers are being left in tax purgatory by the Treasury’s refusal to confirm or deny rumours of changes to Stamp Duty.”

He warns that although September receipts reflect purchases made after speculation began, few buyers would abandon deals at such a late stage. “But transactions could start to dwindle as some buyers choose to hold fire, and we may start to see tax receipts start to lose momentum as a result.”

Several bodies, including the Institute for Fiscal Studies and the Resolution Foundation, argue that Stamp Duty should be abolished altogether as part of wider property reforms. The IFS says Stamp Duty “effectively throws sand in the gears, leading to an inefficient allocation of property”.

Reforms must be well considered

Stinton adds: “Any reform to property tax needs to be well considered and well communicated. Buying a home is likely to be the most expensive purchase anyone can make, so it’s normal for people to want to understand the tax implications.”

Reeves is reportedly considering a number of different options for raising more revenue from property. One is to replace Stamp Duty with an annual property tax on homes worth more than £500,000. She is also looking at charging Capital Gains Tax on home sales over £1.5 million and introducing NI on landlords’ rental incomes.