Chancellor Rachel Reeves has signalled a major overhaul of the UK’s property tax system, with plans to replace stamp duty with a new proportional property tax.
The reform, now making headlines, aims to ease pressure on buyers and create a fairer housing market.
Under the proposal, the new tax would apply only to homes valued above £500,000, shifting the burden from buyers to sellers.
This would mean just 20% of property transactions fall under the levy, compared with the current stamp duty system, which affects about 60% of sales.
Economists argue stamp duty has long been a barrier to home ownership, discouraging mobility and making it harder for families to move up the property ladder.
By restructuring the tax, Reeves hopes to stimulate housing activity while maintaining similar revenues to the £11.6 billion raised last year.
A second stage of reform could see council tax scrapped and replaced by a local property tax. Unlike today’s system—based on outdated 1990s valuations—the new model would reflect current property values, with funds going directly to local councils.
The changes come against the backdrop of a £20–£40 billion fiscal gap. Reeves insists the reforms are not only about raising revenue but also about modernising a regressive tax system that no longer reflects today’s housing market.
Property experts, including Rightmove, have welcomed the debate, saying it could boost affordability and confidence.
But critics warn that regional disparities and implementation challenges could complicate the transition.
With “stamp duty” now trending, the proposal has ignited national debate and will be closely watched by homeowners, buyers, and investors alike.
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