Chancellor Rachel Reeves is assessing the benefits of a new national property tax that could replace stamp duty, according to reports in The Guardian, paid on the sale of owner-occupied homes worth more than £500,000.
The feasibility of the proportional property tax is being examined and modeled by government officials and could be implemented within this parliament, The Guardian reports, with ‘a radical overhaul’ potentially announced in the autumn budget. A second local property tax to replace council tax is also being considered.
The national property tax would be paid to HMRC by owner-occupiers, at a rate set by central government, on the sale of homes worth more than £500,000. It would only apply to primary residences; stamp duty would still be collected on second homes.
However, Paula Higgins, CEO of the Homeowners Alliance, has warned that the government risks paralysing the housing market by triggering uncertainty with the plans.
Higgins commented:
“On the suggestion of introducing a new property tax there shouldn’t be a money grab by treasury at the expense of homeowners. It’s an attack on homeowners and history shows that introducing a new tax is never followed by the removal of older taxes.
“In the interim the government needs to tread carefully. Uncertainty around property taxes causes paralysis in the housing market. We’ve just seen how damaging this uncertainty can be: in April this year, when stamp duty thresholds changed, transactions collapsed by 64% in a single month – the sharpest fall on record. Homeowners can’t afford a repeat.”
TV personality Kirsty Allsopp, co-presenter of several Channel 4 property shows, was rather more scathing of the plans. ‘It is August, anyone who thinks this can be done in a sensible, considered way by October is a moron’, she wrote on X.
It is August, anyone who thinks this can be done in a sensible, considered way by October is a moron. Yes, Council Tax needs addressing, so does Stamp Duty, but briefings to the Guardian aren’t the way to go about it. 🙄😳😡 https://t.co/7cJog78Jjh
— Kirstie Allsopp (@KirstieMAllsopp) August 18, 2025
Only 40% of properties in England are currently free from stamp duty, down from 53% in 2017. Last year, data released by Rightmove found that only 4% of homes for sale in London were exempt from the tax, compared to 71% in the North East.
The £300,000 first-time buyer threshold was introduced in 2017, when the average property price was £226,071. That has now jumped by over £42,000, to £268,652. The £125,000 that applies to all other home movers has been in place since March 2006, when the average house price was around £150,000.
This breaking story will be updated with industry reaction throughout the day.
3 responses
What a bunch is misguided, naive, woefully inept, out of touch, and lacking in common sense idiots.
You only have to look at very recent GDP figures against completions to see how much influence the property market has.
And now they wish to throw uncertainty in?
If you’re in the market for anything over £500k what will you do now? Once this story has national coverage, with rumours nationally the market may well come to a halt.
If you are going to do something like this, you do it. You don’t brief.
Once a government starts leaking this out everybody knows it’s because THEY aren’t sure. THEY don’t have confidence.
Once that perception hits nobody knows what to do. Including selling, or buying anything certainly over £1m where the stamp duty equates to 2-3 years of capital appreciation as a minimum.
I cannot fathom the level of stupidity with this lot…..ok, scrap that I can.
Reeves and the Treasury need replacing with the smartest 10 year olds we can find. We as a nation deserve at least that level of competence.
Another example of what we already know. Reeves is utterly incompetent and clueless.
To the Socialists property is theft. This is just an ill-thought out wealth tax.
Taxing the way Labour is thinking will reduce equity and will wreck loan to value for mortgages and could destroy the equity release market. Who will have priority over sale proceeds? HMRC 1st? Lenders 2nd? And no doubt there will be anti-avoidance to ensure tax is due for any under value disposal – presumably no-one will be able to sell or dispose freely without an HMRC compliant valuation!!