The government may be making life difficult for the private rental sector but it relies heavily on landlords to give it money.
That’s because it’s now clear that buy-to-let and second home transaction account for the majority of Stamp Duty receipts in over half of English local authority areas.
This is up from under a quarter when a Stamp Duty surcharge was first introduced.
The analysis has been conducted by specialist lender Paragon Bank.
In details, the analysis shows that in the 2024/25 financial year, income from higher‑rate additional dwelling (HRAD) transactions accounted for at least half of total Stamp Duty receipts in 164 English local councils.
This is a 164% increase in eight years.
The analysis highlights a significant structural shift in the tax base, with HRAD Stamp Duty transactions playing an increasingly dominant role in funding Stamp Duty receipts across large parts of England.
Where buy-to-let and second homes now dominate Stamp Duty
Many of the councils where buy‑to‑let and second‑home purchases account for the highest proportion of Stamp Duty receipts are not traditional holiday or second‑home hotspots, but large urban authorities in the Midlands and North, suggesting the transactions are driven by buy-to-let 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.
| Local authority | HRAD share of receipts (2024/25) | HRAD share of receipts (2016/17) |
| Kingston upon Hull, City of | 97% | 68% |
| Sandwell | 92% | 63% |
| Blackpool | 92% | 79% |
| Hyndburn | 89% | 69% |
| Barking and Dagenham | 89% | 56% |
| Stoke-on-Trent | 85% | 61% |
| Burnley | 82% | 65% |
| Leicester | 82% | 59% |
| Wolverhampton | 81% | 56% |
| Lincoln | 81% | 63% |
| Middlesbrough | 80% | 53% |
| Nottingham | 80% | 61% |
| Salford | 80% | 49% |
| Luton | 80% | 52% |
| Manchester | 79% | 52% |
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%+ stamp duty revenues from HRAD purchases and 34% in the South East.
| Region | LAs HRAD share of receipts 50%+ | % of LAs 50%+ |
| Yorkshire and the Humber | 14 | 93% |
| North East | 11 | 92% |
| North West | 31 | 89% |
| East Midlands | 16 | 67% |
| London | 20 | 61% |
| South West | 15 | 58% |
| West Midlands | 13 | 43% |
| South East | 22 | 34% |
| East of England | 15 | 33% |
A 3% Stamp Duty surcharge was introduced in April 2016 to cool buy‑to‑let and second‑home demand, extended to 5% in the 2024 Autumn Budget.
While transaction volumes have softened in some markets, the receipts data suggests the policy has also increased reliance on higher‑rate purchases as a source of stamp duty revenue.
Louisa Sedgwick, Paragon Bank Managing Director of Mortgages, says: “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.
“They have already been hit with an increase to the surcharge in 2024 and the impact of the policy has been to pivot transactions to northern regions, where property is typically cheaper.
“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.”
