Research from global residential property agents Knight Frank suggests changes to non-dom status in March last year have cost the government £401 million in lost stamp duty revenue.
The analysis revealed that the number of £5 million-plus property sales in London fell by 14% in the 12 months to May 2025 compared to the previous year. The loss is calculated on the basis that all transactions would be subject to the additional rate of stamp duty, with half incurring the 2% non-resident surcharge.
Last week, it was reported that the government could roll back plans to introduce inheritance tax on the global assets of non-doms after an exodus of wealthy individuals from the ‘punitive’ UK tax regime.
The changes are believed to have triggered a ‘wealth exodus’ and a loss in capital gains tax revenue, leading to claims that the government is planning to make overseas assets exempt from inheritance tax.
Tom Bill, head of UK residential research at Knight Frank, said the resulting effect on the prime property market was predictable. He added:
“The news of a possible U-turn must be a bittersweet moment for those who told the government this would happen.
“The lost revenue takes on extra significance given that the government’s financial headroom is so tight. A figure of £401 million represents 4% of £9.9 billion, which is the latest OBR estimate of how much breathing room the Chancellor has.”
Bill also pointed out that the calculation doesn’t include the economic of house buying activity, which Knight Frank estimated at £10,000 for every home move.
‘As the pressure on the government finances intensifies, the relative size of such black holes will only grow’, Bill concluded.
