There’s growing discussion about changes to how homes are taxed in the UK. Recent reports suggest the government is looking at reforms that could affect stamp duty, council tax, and potentially introduce new types of property tax.

At Moneybox, we’re always keeping a close eye on speculation around financial changes and how they could impact our customers. We know they can bring both opportunities and questions about your financial journey. Let’s break down the changes being considered and how they might affect your home-buying and selling plans.

 

Property tax reform: why now?

The UK’s property tax system has been in place for decades, but experts argue it no longer reflects today’s housing market:

  • Stamp duty is a one-off cost, paid upfront when buying a home, which can make moving home expensive for those who pay it.
  • Council tax relies on property values from 1991, meaning homes that are currently equal in value can be taxed very differently, depending on past valuations.

The Chancellor has tasked the Treasury with exploring options to overhaul these tax systems. New ideas under discussion include:

  • Replacing stamp duty with a proportional annual property tax, potentially with revenue split between national and local government based on property value thresholds.
  • Introducing a new tax on higher-value homes, or adjusting capital gains tax rules to remove exemptions on homes above certain thresholds.

 

What experts are saying

Property taxes already make up a significant proportion of the UK’s tax revenue. For example, stamp duty alone raised £11.6bn in the 2023/24 tax year, according to government figures. While this shows how significant it is, it also means that any changes need to be carefully balanced.

Brian Byrnes, our Head of Personal Finance, comments:

“With a couple of months to go before the likely date of the Budget, and with varying estimates being made about the “black hole” the Chancellor needs to fill in the nation’s finances, rumours of tax changes under consideration will no doubt be a feature of the coming months. Should these rumoured changes come to pass, they would undoubtedly be the biggest changes to the Stamp Duty regime in decades. However, it is very important not to take action with personal finances based on rumours or speculation, and instead wait for the details on any policies that do get announced in the Autumn Budget.”

 

What this could mean for homeowners and buyers

  • If you own a higher value property: You might face new annual charges – or potential capital gains tax – especially if thresholds such as the £500,000 threshold being discussed are set.
  • Buyers and movers: If stamp duty is replaced, the upfront cost of buying should be cheaper, but how and when those changes happen would determine the real impact for your home purchase.
  • Local councils could have a more stable source of funding, but how much control they’d have remains unclear.
  • The broader housing market may experience a slowdown while changes are introduced. It would take time to roll out a replacement scheme for stamp duty. Also, sellers might reprice their homes to account for new fees, or delay their decision to move.

 

What’s next?

At this stage, nothing has been confirmed. The government is still reviewing options and any changes would likely be announced in the Autumn Budget, expected to take place in October.

For anyone planning to buy or sell a home, it’s worth keeping an eye on announcements. The exact thresholds, rates, and timing would determine the real impact and help you understand your next steps. For now, the best approach is simply to stay informed as the proposals develop – and as always, we’ll keep you updated every step of the way.

Looking to buy or remortgage? Start with a Mortgage in Principle (MIP) in the Moneybox app. It’s a free estimate that shows you how much you could borrow, takes less than five minutes to complete, and won’t affect your credit score.

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Tax treatment depends on individual circumstances and may be subject to change in the future.

Moneybox does not offer personal tax advice. If needed, please speak to a qualified financial adviser or conveyancer for a personal recommendation.

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