Chancellor urged to do more to support property investors in budget

An estimated £541 million has been lost in stamp duty revenue on property sales above £5 million in the 18 months following Rachel Reeves’ first Budget on 30 October 2024, according to Knight Frank.

The figure is based on a comparison of sales in the 18 months before and after that date, following which Reeves raised the second-home stamp duty surcharge to 5% from 3% and set out the replacement for the non-dom regime.

After adjusting for price movements, so the £5 million threshold means the same in both periods, the number of sales in England dropped by 14% to 2,208 from 2,569, data from Land Registry, LonRes and Knight Frank shows. Estimated stamp duty on those £5 million-plus sales fell 16% to £2.855 billion from £3.395 billion.

Attracting inward investment

The estimates assume half of buyers paid both the second-home surcharge and the 2% overseas surcharge, both of which were applied evenly across all sales. An estimated £201 million more in stamp duty was collected in the second period due to the higher second-home surcharge. The £541 million is the net loss to the Treasury after taking this extra revenue into account.

Although stamp duty is unlikely to be cut in next week’s Budget there has been speculation that of a form of visa to attract wealthy overseas investors will be introduced, such as the FIFB proposal for a global investor visa, which is based on a minimum investment of £2.5 million and an annual flat-rate tax of £200,000 for up to 15 years, with a route to indefinite leave to remain. FIFB estimates the plan could attract more than £225 billion of inward investment over a decade.

Reeves replaced non-dom status with a regime that exempts newcomers’ foreign income and gains from UK tax for their first four years of residence.