The government collected £3.4bn of stamp duty from the London's homebuyers according to statistics released today.
The number represented 46 per cent of the total amount of stamp duty paid in the UK over the last year. And together with the rest of the south-east, together the two areas accounted for more than two-thirds of the money quaffed by the taxman.
A total of £80m was paid in stamp duty in relation to purchases of properties in Wales and £20m was in remitted to HM Revenue and Customs (HMRC) for Northern Ireland sales.
The national disparity is due to the fact that stamp duty is charged in bands depending on value of the property and many property sales outside of London fall below £125,000, a level at which the levy is not charged.
"This difference shows the contrasting conditions in the London housing market compared with the rest of the country," the government said in commentary to the data release.
|Property value||Stamp duty rate|
|Up to £125,000||0 per cent|
|The next £125,000 (the portion from £125,001 to £250,000)||2 per cent|
|The next £675,000 (the portion from £250,001 to £925,000)||5 per cent|
|The next £575,000 (the portion from £925,001 to £1.5 million)||10 per cent|
|The remaining amount (the portion above £1.5 million)||12 per cent|
The former residential chairman of the Royal Institute of Chartered Surveyors, Jeremy Leaf, said that the statistics underlined the importance of London in generating tax revenues and warned that cooling house prices could have an adverse effect on the government's finances.
"When you look at the number of property transactions that occur in the capital and the amount of revenue generated you realise just how vital London is. The government should be careful about trying to reduce property prices and activity in the capital as it is the engine of the national economy," he said.