Stamp duty receipts fell 2.5% to £7.3bn as the reforms made by former chancellor George Osborne take their toll on the housing market.
Home sales in London produced £3.37bn for the Treasury in stamp duty in the year to March 31, up 11% on the previous year. This means that the capital now generates 46% of the England and Wales’ stamp duty receipts. Scotland was not counted as it has its own method of collecting property taxes.
“These figures underline the importance of London to the growth of the economy and taxation revenue,” said Jeremy Leaf, owner of an estate agency in north London.
He added: “When you look at the number of property transactions that occur in the capital and the revenue generated you realise just how vital London is. The government should be careful about trying to reduce property prices and activity in the capital as it is the engine of the national economy.”
The amount of stamp duty from residential properties costing more than £1m rose by 19% from last year to £2.6bn, after the former chancellor increased tax on them in December 2014. These homes made up 36% of the revenues, but just 1.6% of total transactions.
Unsurprisingly, there has been a sharp decline in the volume of transactions of high-value homes as a consequence of the tax increase, the figures show.
Lucian Cook, head of residential research at Savills, commented: “There was a lot of speculation that the stamp duty take from homes sold for over £1m would have fallen because of the changes introduced in December 2014. It will be frustrating that this hasn’t proved to be the case for those arguing the top end of the market has become too heavily taxed.”