Sales handled by Foxtons fell by a quarter in 2016 because of higher stamp duty on top homes, the estate agent will report this week.
The London-based agent is set to reveal that profits slumped to £25 million from £43 million last year.
Its sales have dried up since the first quarter of last year when a huge number of London properties changed hands in the capital ahead of the stamp duty overhaul.
Some analysts say the stamp duty hikes on more expensive homes have been counter-productive because Treasury revenues from the tax will fall overall at the top end.
The then Chancellor George Osborne announced a shake-up of the tax in 2014 which resulted in the rate for properties worth more than £1.5 million rise to 12 per cent.
Countrywide – which owns 55 estate agency brands – will meanwhile say profits fell to £56 million from £86 million last year, according to broker Peel Hunt.