Rumours are circulating that stamp duty could soon be scrapped — replaced by a completely new property tax system. But how likely is this change, and what would it mean for buyers and sellers?

Here’s our breakdown of the speculation, what it could mean for the housing market, and our view on whether this would be good news for homeowners.

What Property Tax Changes Are Being Discussed?

At the moment, nothing is confirmed, but the proposals being talked about include:

  • Replacing Stamp Duty Land Tax (SDLT) with an annual property tax on homes sold for more than £500,000

  • Charging capital gains tax (CGT) on the sale of homes worth more than £1.5 million

  • Revaluing council tax bands, which are still based on 1991 property values

These ideas often appear in the run-up to the Autumn Budget, with ministers looking for ways to boost market activity, encourage moving, and raise revenue.

How Property Tax Works Today

Currently, there are three main ways the government collects tax on property:

  • Stamp duty – paid when you buy a property.

  • Council tax – paid annually to your local authority, based on 1991 property valuations.

  • Capital gains tax – paid on property profits, but only on second homes and investments (not your main residence).

Stamp duty is often described as a major barrier to moving, especially in areas with high house prices like London and the South East.

Who Pays Stamp Duty Right Now?

We’ve analysed who is paying stamp duty today, compared with earlier this year when tax reliefs were still in place.

  • 83% of homeowners now pay stamp duty when they move (up from 49% before April 2025).

  • 41% of first-time buyers now pay stamp duty (up from 20% before April).

  • The burden is heaviest in London, where 97% of homeowners and 79% of first-time buyers pay stamp duty.

London and the South East together account for 60% of all stamp duty payments across England.

The Case for Scrapping Stamp Duty

✅ Removes barriers to moving – encouraging transactions and improving labour mobility.
✅ Boosts housing market activity – particularly in the mid-market price range up to £500k (two-thirds of UK sales).
✅ Supports housebuilding – helping the government reach its target of 1.5 million new homes by 2029.
✅ Improves affordability for first-time buyers – particularly in London and the South East.

The Potential Downsides

⚠ £10+ billion revenue gap – stamp duty currently raises more than £10bn a year.
⚠ Bigger burden for London & South East homeowners – 1 in 3 would pay an annual property tax.
⚠ Market distortions – expect a “cliff edge” around the £500k price point, with demand bunching just below the threshold.
⚠ Short-term disruption – buyers and sellers could pause decisions while they wait for clarity.

Capital Gains Tax on Main Residences

Introducing CGT on homes worth more than £1.5m would be a major change.

Only 4% of homes are currently worth more than £1.5m, but this would disproportionately hit London homeowners — and could raise fears that the threshold might be lowered in future.

Main residence CGT relief is currently worth £36bn a year, so even a partial removal would be a major policy shift with big political implications.

Changes to Council Tax

A revaluation of council tax bands could “tidy up” the system, but unless new higher bands are introduced, it is unlikely to raise enough revenue to replace stamp duty.

Any changes here would again have the greatest impact in higher-value areas.

Our View

Scrapping stamp duty would be welcomed by many buyers and sellers and could inject life into the housing market — especially for properties priced under £500k.

However, an annual property tax could become a long-term burden, particularly in London and the South East where prices are higher, and risks dampening demand where the market has already been flat for a decade.

The biggest question remains: how will the government replace the £10+ billion currently raised by stamp duty each year? Until we have answers, the market is likely to remain cautious — and we could see a short-term slowdown as people wait for clarity.


Key takeaways

  • There has been a lot of speculation about possible changes to property taxes in the Autumn Budget, which is common ahead of any Budget
  • The speculation is linked to recent reports published by various think tanks
  • One idea is to replace stamp duty with a new annual property tax on homes sold for more than £500k
  • Another is to tax sellers on the capital gains they make from selling their main residence if it’s worth more than £1.5m
  • Reforms to encourage market activity and remove barriers to homeownership are welcome
  • But speculation can be unhelpful for those in the middle of buying a home or making an offer
  • And remember, most speculation stays as just that – and doesn’t turn into the reality
  • We dive into who currently foots the UK’s stamp duty bill and who would benefit from changes to the property tax system