Rachel Reeves stamp duty receipts fall £541m on £5m-plus homes

Stamp duty receipts from England's most expensive home sales fell by an estimated £541 million in the 18 months after then-Chancellor Rachel Reeves's October 2024 Budget raised property taxes, according to an analysis by the estate agency and property consultancy Knight Frank published in October 2026. The firm says sales of homes priced above £5 million dropped 14% over the period, and that the fall in transactions outweighed the extra money raised from a higher surcharge on second homes. The figures arrive days before Chancellor John Healey presents his first Budget on 28 October 2026.

Stamp duty land tax is the tax paid by buyers of property in England. It is charged in slices: the higher the price, the higher the rate on each part of the price above a threshold. Buyers of additional homes, such as second homes or buy-to-let properties, pay an extra surcharge on top. In the October 2024 Budget the government raised that surcharge.

The Knight Frank analysis tests a simple question every finance ministry faces: does raising a tax rate raise more money? It can fail to do so if buyers respond by buying less, delaying purchases or moving money elsewhere. In the top bracket of the market, where a single sale can produce hundreds of thousands of pounds in tax, even a modest fall in the number of deals has a large effect on receipts. By Knight Frank's reckoning, the extra £201 million from the higher surcharge was swamped by the money lost because fewer expensive homes changed hands.

There are limits to what the figures show. They are an estate agency's estimate built from transaction data, not an official count, and an agency that earns fees from high-value sales has an interest in lower property taxes. Other economic factors over the same period may also have reduced demand for the most expensive homes. Still, the official data for January to April 2026 also show stamp duty receipts lower than a year earlier, which supports the broad direction of the estimate.

For Indian readers, London's prime property market has long drawn buyers from India and the Indian diaspora, so changes to UK property taxes affect a real group of investors and families.

Short-term: The analysis adds to pressure on Chancellor Healey ahead of his 28 October Budget. Knight Frank has urged him to win back wealthy investors, and the figures will be used by those arguing against further property tax rises. Whether he changes stamp duty is not known until he speaks.

Long-term: If high property taxes keep deterring top-end purchases, the Treasury may face a choice between lowering rates to revive deals or accepting lower receipts from this part of the market. Fewer transactions also mean less business for estate agents, lawyers, removal firms and builders who depend on home sales.

Who is affected: Buyers and sellers of high-value homes in England, especially in London; second-home buyers and landlords; the UK Treasury; and firms that earn their living from property transactions.

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