"The removal of stamp duty would undoubtedly be a huge incentive to attract buyers back into the prime London market"
- Damien Jefferies - Jefferies London
Research from Jefferies London suggests that removing Stamp Duty Land Tax (SDLT) could save prime London buyers hundreds of thousands of pounds, with some of the capital’s most expensive postcodes seeing potential reductions of nearly half a million pounds.
The analysis, which examined Land Registry price paid data from the past 12 months across 69 prime London postcodes, found that the average buyer in these areas would save £55,000 if SDLT were scrapped. This is significantly higher than the wider London average saving of £16,250.
At the top of the market, Mayfair and St James’s in the W1K postcode saw the largest SDLT bill. With an average sold price of £4.5m, current SDLT costs stand at £453,750. Other areas with high potential savings include:
WC2A (Chancery Lane) – £249,750
SW1X (Knightsbridge and Belgravia) – £213,750
SW1E (Pimlico and Victoria) – £192,750
WC1A (New Oxford Street) – £144,450
SW1W – £132,750
W1G – £119,550
W8 – £105,750
WC1B – £96,750
W1J – £92,750
Comparing SDLT with the proposed homeowner tax
The government has indicated that a new annual property tax could replace SDLT and possibly council tax. Current estimates suggest rates of 0.54% annually on the portion of a property worth between £500,000 and £1m, and 0.81% on values above £1m.
For W1K, with an average house value of £4.5m, this would mean £2,700 annually on the first threshold and £28,350 on the second, totalling £31,050 per year. At this level, it would take more than 14 years of paying the new levy to match today’s upfront SDLT charge.
In other high-value locations:
A £2.8m home in WC2A would attract £17,280 per year.
A property in SW1X Knightsbridge and Belgravia would generate £14,850 annually.
While these sums are notable, they remain far below the current upfront SDLT costs buyers face in these markets.
“Scrapping stamp duty would act as a significant incentive for homebuyers at all levels of the property ladder, but nowhere more so than in the prime London market, where this archaic tax grab equates to as much as half a million pounds on the average cost of a home in the capital’s most prestigious postcodes,” said Damien Jefferies, founder of Jefferies London.
“It remains to be seen whether the government will really remove it, given how much revenue it generates, and if they do, what will replace it. Taxing property values annually sounds messy to say the least, not least because house prices do not remain static from one year to the next. That said, the removal of stamp duty would undoubtedly be a huge incentive to attract buyers back into the prime London market.”
