The 2025 forecast revenue surplus is £25m., which has partially been driven by higher income from document duty, which is £8m. above budget.
The Budget noted that there had been significant slowdown in property transactions in 2023 and 2024, but this had improved in 2025, and a small number of large transactions also helped to boost receipts.
‘Local market purchase prices continued to decline in real terms throughout the first two quarters, although this downward trajectory showed signs of moderation in the second quarter,’ the budget report said.
‘This has exerted downward pressure on document duty receipts. However, this impact has been offset by an increase in the volume of property transactions, likely driven by falling interest rates and a delayed response to the reduction in purchase prices – both of which have contributed to improved affordability and accessibility for prospective buyers.’
There is still a high number of expensive homes being conveyed.
Last month alone there were 16 properties sold for more than £1m., of which three were for more than £3m.
Overall for the year so far there have been nearly 100 properties sold for more than £1m. – just below 10% of all the houses sold.
Looking at the document duty forecast for this year, it is expected to be a 47% increase compared to 2024 as of the end of June 2025.
However, the Budget sounded a note of caution.
‘Document duty receipts are highly sensitive to shifts in property transaction volumes and prices,’ P&R said.
‘A significant shift in housing market conditions could positively or negatively impact document duty receipts compared to the budgeted figure. The budget assumes that the current level of property transactions continues, and the best case assumes a return to the long-term trend.’
Document duty varies depending on sale price. For example, those under £300,000 pay 2.25%, while those in the £950,000 to £1.25m. range pay 4.25%. Sales over £5m. attract document duty of 7% – a new higher rate which was introduced at the start of this year.
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