Property tax overhaul being considered

In August 2025 the Guardian newspaper reported that the Treasury is considering overhauling the country’s stamp duty and council tax systems. A significant measure under consideration is a new ‘proportional’ national property tax on the sale of homes over £500,000.

The new tax would replace stamp duty and would be paid by owner-occupiers on houses worth more than £500,000 when they sell their home. The rate would be set by central government and collected by HMRC. Crucially, the new tax would not replace stamp duty on second homes.

No final decisions have been made at this point but it is possible that some related announcements will be made in the Autumn Budget on 26 November 2025.

Phasing in a replacement for stamp duty would take time and it is thought that a range of phasing options are being considered. It is thought that the current government would be able to introduce the new tax during this parliament but that overhauling the council tax system would require Labour to win a second term.

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