The debate on UK housing taxation has reignited following reports that Chancellor Rachel Reeves is considering major reforms ahead of the UK Autumn Budget. One of the proposals reportedly being considered by Reeves includes replacing buyer-side stamp duty with a national property tax levied on sellers of homes worth more than £500,000, and the possible reintroduction of capital gains tax (CGT) on main residences sold for over £1.5 million.
While these ideas remain under discussion, their potential impact across different regions and on homeowners is already raising concern.
Easing Buyers, Burdening Sellers
Stamp duty has long been criticised as a “deal killer,” making transactions more expensive and discouraging mobility. By shifting the responsibility to sellers, the Treasury could make it easier for first-time buyers and families to step onto or move up the property ladder. But this new tax would not replace stamp duty on second homes or investments properties. Furthermore, the relief for purchasers would be offset by new costs for sellers, particularly in London and the South East where property prices often exceed the £500,000 threshold.
Regional impact
The effects would not be evenly spread. According to Rightmove, nearly 60% of homes in London are listed above £500,000, compared with just 8% in the North East. At the £1.5 million CGT threshold, London again dominates, accounting for 11% of listings and around 5% of sales. By contrast, such high-value properties are almost non-existent in northern regions. This disparity suggests the reforms would disproportionately impact homeowners in the South, potentially widening the north–south divide.
Behavioural impact
The behavioural consequences could also be significant. If sellers face new taxes, some may hold back from moving, particularly those considering downsizing. This would reduce the supply of larger family homes and could push prices higher in already overheated markets. First-time buyers might benefit from lower upfront costs, but in practice could face higher asking prices as a result of tighter supply.
Warnings from the industry
Industry experts are urging caution. Sarah Coles of Hargreaves Lansdown notes that families should not make hasty decisions based on speculation, pointing out that moving home is as much a life choice as it is a financial one. Rightmove’s CEO Johan Svanstrom has also warned that significant tax changes risk undermining market liquidity and limiting opportunities for workers and young families.
How homeowners can prepare
- Sellers of homes worth between £500,000 and £1.5 million should model their potential net proceeds under both the current and possible future systems.
- Owners of higher-value homes may wish to gather evidence of purchase costs and improvements in case CGT becomes payable.
- Buyers should remain cautious: while they may save on stamp duty, increased demand and reduced supply could outweigh the benefits.
Our view
Reeves’ proposals reflect the government’s pressing fiscal needs. With a commitment not to raise income tax, VAT or national insurance, housing has become the next logical target. While shifting the burden from buyers to sellers could help some purchasers, the policy may backfire if sellers simply increase asking prices or avoid selling altogether. This would reduce supply and risk making housing even less affordable, particularly in London.
The question of fairness is also complex. Despite regional economic disparities, homeowners in the South may feel they are being unfairly singled out, while many parts of the North would remain largely unaffected, potentially deepening regional divides.
In reality, this appears more like a short-term revenue measure than a long-term solution. A meaningful reform would involve updating council tax, which is still based on 1991 valuations, and creating a fairer system that reflects today’s property market.
Conclusion: Why legal advice matters
These proposals highlight how quickly property tax rules can change. Whether you are buying or selling, the amount of tax you pay – and how much you ultimately keep could look very different in the near future. Buying or selling a home is often one of life’s most important financial decisions, and having the right guidance is essential.
As specialist property lawyers, we can explain the latest rules, identify hidden risks in contracts, and assess how new taxes might affect your transaction. We will also ensure your documentation is watertight and that you are fully protected if reforms are introduced.
If you are planning a move, having a trusted solicitor by your side is the safest way to navigate these changes with confidence. We are here to help – please feel free to contact us at info@lisaslaw.co.uk for tailored advice and support.
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