Homebuyers paid a record £16.2bn in stamp duty last year

The 2022 stamp duty take also increased year-on-year because the tax holiday introduced by then-chancellor Rishi Sunak in July 2020 was still in place for much of 2021. This kept stamp duty bills artificially low even though prices were climbing fast.

From July 2020 until the end of June 2021, buyers paid no stamp duty on the first £500,000 of the property. For the following three months to the end of September 2021, this nil-rate band was tapered to £250,000, before reverting to £125,000 from October 2021 through the majority of 2022.

At the end of September 2022, then-Chancellor Kwasi Kwarteng raised the nil-rate band again from £125,000 to £250,000, and increased the tax-free allowance for first-time buyers. In November, Chancellor Jeremy Hunt announced that these changes would only be temporary, lasting until the end of March 2025.

But by that point, house prices had climbed so high that these changes brought only a marginal dip in the stamp duty take at the end of last year. In December, stamp duty receipts from homebuyers were £1.4bn – a drop of only £3.2m since December 2021.

The new thresholds will bring some relief for buyers over the next couple of years but the Government should consider wider stamp duty reform to encourage more efficient use of the housing stock, said Jonathan Stinton, of Coventry Building Society. This could include incentives for energy efficiency improvements and waivers for downsizers, he added.

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