Landlords and second-home buyers are now contributing a growing share of Stamp Duty revenue across England, with new analysis suggesting the private rented sector has become a key source of government tax income despite increasing policy pressure.
Research from specialist lender Paragon Bank shows that buy-to-let and additional property purchases now account for the majority of Stamp Duty receipts in over half of local authority areas in England. This marks a sharp increase compared with just under a quarter of councils when the surcharge was first introduced.
Rising reliance on higher-rate property purchases
In the 2024/25 financial year, transactions subject to the higher Additional Dwelling Rate (HRAD) accounted for at least 50% of Stamp Duty receipts in 164 English local authorities. This represents a 164% rise over the past eight years, highlighting a major shift in how Stamp Duty revenue is generated.
The data suggests that in many areas, particularly urban parts of the Midlands and the North, additional property purchases are now the dominant driver of Stamp Duty income rather than traditional owner-occupier transactions.
In fact, in around 8% of councils, these purchases account for three-quarters or more of total receipts. Some of the highest proportions were recorded in areas such as Kingston upon Hull, Sandwell, Blackpool, and Wolverhampton.
Table: Areas with highest share of Stamp Duty from additional properties
| Local authority | HRAD share of receipts (2024/25) | HRAD share of receipts (2016/17) |
| Kingston upon Hull | 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% |
Regional divide in Stamp Duty dependence
The findings also show a clear regional imbalance. In Yorkshire and the Humber, 93% of local authorities now generate at least half of their Stamp Duty revenue from higher-rate property transactions. This compares with 92% in the North East and 89% in the North West.
By contrast, the proportion is much lower in southern regions. Only around a third of councils in the South East and East of England reach the same level of dependence on additional-property purchases.
Table: Regional share of authorities where HRAD makes up 50%+ of Stamp Duty
| Region | Local authorities with 50%+ HRAD share | % of local authorities |
| 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% |
Policy impact and shifting investment patterns
The Stamp Duty surcharge, originally introduced at 3% in 2016 and later increased to 5% in 2024, was designed to cool demand from landlords and second-home buyers. However, while transaction volumes have softened in some parts of the market, the revenue data suggests a different outcome.
Rather than reducing reliance on buy-to-let activity, the surcharge appears to have made higher-rate purchases a more important and consistent source of tax income for the Treasury.
Industry concerns over long-term effects
Louisa Sedgwick, Managing Director of Mortgages at Paragon Bank, said the policy has reshaped rather than reduced the role of additional-property purchases in the tax system.
She noted that these transactions now form a much larger share of Stamp Duty receipts than when the surcharge was first introduced, and that landlords have already been further impacted by recent increases.
She also warned that investment is increasingly shifting towards cheaper northern regions, while parts of the South may see reduced activity. Over time, this could create an uneven market, with potential consequences for housing supply and rental costs in higher-demand southern areas.
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