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August 20, 2025
News is out this week that Chancellor Rachel Reeves has asked Treasury officials to review the way Britons are taxed when it comes to property – from council tax to stamp duty.
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No firm announcements have yet been made… which means of course, the rumour mill is in full grind! Reports do suggest however that one way or another, Reeves’ Treasury team is weighing up reforms that could change the way we all buy, sell, and own homes in the future.
Early signals are that higher-value homes in particular could be the main focus – so of course, in a place like Twickenham, it has got our ears well and truly pricked up. Reports indicate that properties over £500,000 may well face additional or alternative kinds of taxes, with speculation that we will either see new council tax bands or council tax replaced with a brand new property tax altogether, and that stamp duty may get a complete overhaul.
Let’s take a look at what has been said over the past couple of days.
Property taxes are a big earner for any British government. The Office for Budget Responsibility (OBR) expects stamp duty alone to raise £15.7 billion this year, climbing to £26.5 billion by 2030.
Council tax revenues are forecast to bring in another £50 billion annually.
But at the same time, economists including those at the Institute for Fiscal Studies (IFS) and the International Monetary Fund (IMF) (and, indeed, many estate agents!) have long argued that stamp duty is an inefficient tax.
They call it one of Britain’s “worst and most damaging” levies because of the way that it discourages people from moving – and in many ways, when people are restricted from moving home, the economy takes a hit. This is because people move less frequently for new jobs, which reduces potential corporation tax and income tax revenues.
Even without job moves in the equation, a growing family might wish they could upsize, or an older owner with children now living away may wish they could downsize, but the extra cost that stamp duty brings often means that potential movers worry they can’t afford to get what they really want and instead stay put.
The result? Fewer homes come to market, and the economy as a whole suffers from reduced mobility as a result.
The options under review reportedly include:
Officials have stressed that any reforms would need to “protect revenue”. In other words, if stamp duty were reduced or abolished, the lost money would have to be made up elsewhere – in other words, we will be likely to see higher charges on more expensive properties, so that ‘those with the broadest shoulders’ carry the burden.
For homeowners and buyers, the way property is taxed can significantly affect affordability and behaviour:
For the housing market as a whole, reform could mean more mobility and a greater flow of homes being listed, helping to ease supply shortages in many areas. Equally though, it could really rebalance the nature of the UK property market as a whole, with many average homes and average households in London and the South-East facing disproportionately heavy bills to prop up municipal costs in less property-valuable areas of the country. And that sort of imbalance is never healthy in the long term.
Changing property tax is never straightforward – and for politicians, it is never an easy ride.
Margaret Thatcher’s government famously ran into trouble over the “poll tax” in the 1990s, which led to widespread protests. Similarly, Scotland has looked at land value taxes but in the end only pushed ahead with a reformed version of council tax.
This is why, for the time being, even though Ms Reeves has asked her officials to look at the options, we should not expect overnight changes.
Introducing new council tax bands alone could take well over a year because of the time it would take the Valuation Office Agency to reassess homes – especially as it goes through the process of being absorbed more fully into HMRC.
The impact of any reform will vary dramatically depending on where people live and the types of homes in your area. According to Hamptons, half of all English homes that sell for more than £500,000 are in London, with another 26% in the South East. That means homeowners in those regions would be disproportionately affected by any new taxes on higher-value homes.
This is how things shape up locally:
The average house price in Twickenham is just over £770,000 according to data from Rightmove. If these reforms do focus on targeting properties valued over £500,000, it would affect around 48% of properties in Twickenham – this is based on the roughly 2,200 properties sold at £500,000 or above over the past 12 months, out of a total of just over 4,600 property sales altogether – as catalogued by property data site PlumPlot.
The idea is that the value of someone’s house determines the level of someone’s wealth, and therefore the ability that someone has to pay a property tax – tax that would go into a central pot to fund municipalities across the UK.
But the trouble here is that someone with a £500,000 property in the borough of Richmond upon Thames is not necessarily ‘wealthy’ in the same sense that someone might be who has a £500,000 house in Richmond, North Yorkshire.
Look on Rightmove today for ‘Richmond upon Thames’, and generally speaking £500,000 picks you up a 2 bedroom flat. In Richmond, North Yorkshire, a £500,000 doesn’t yield a single result – the most expensive property currently listed being £490,000, a fully refurbished 4 bedroom detached house.
This isn’t intended as a commentary about north versus south, or a comment on whether such a house price discrepancy is fair or otherwise – but it is to say, the value of property here, and across much of London and the South East, doesn’t truly represent somebody’s socio-economic position.
Someone in a 2 bedroom flat worth £500,000 here is not necessarily in a position to pay a wealth-based property tax any more easily than someone in a £100,000, 2 bedroom apartment up in Yorkshire.
We can all see where thoughts like this stem from… but it should be patently obvious that more thinking needs to be done.
For now, nothing is set in stone. The Chancellor is under pressure to balance the books and stimulate growth, and property tax is a tempting lever to pull.
But reforms of this scale are complicated, politically sensitive, and take time to implement.
What’s certain is that homeowners, buyers, sellers and, not least, we ourselves at Bartlett and Partners, will all be watching closely.
If changes are announced in the next Budget – and my suspicion is that it may be a little too soon to expect a wholesale change of such a nature, but we’ll see – they could reshape how we think about the cost of moving and the responsibilities of ownership.
For anyone considering a move, our message right now is: stay informed, keep an eye on developments, and take advice when the time comes. Stay tuned to our blog and our social media for further updates, and if you’d like to talk more, please do give us a call.
Will stamp duty be scrapped in 2025?
At this stage, it seems unlikely, with the Budget only two months away – but not impossible. The Chancellor has asked Treasury officials to review how property is taxed, and scrapping or reforming stamp duty is one of the options on the table. But nothing has been announced yet, and any major changes would likely take time to implement. For now, buyers should certainly expect the current stamp duty system to remain in place until further details are confirmed in the Budget – and even if announced, the lead time for implementation is likely to be months away.
How would property tax reform affect homeowners in London?
If reforms target higher-value homes, Londoners could be disproportionately affected, and that includes here in Twickenham. Around half of all homes in England selling for more than £500,000 are in the capital, so any new bands or recurring property taxes would fall heavily on London households. In practical terms, if stamp duty is scrapped, yes it could mean lower upfront costs when buying, but it may mean higher annual bills for homeowners in London to balance the books. In areas like Twickenham and Teddington, where average prices are well above the £500,000 mark, this will obviously be quite impactful – but it is unlikely to lead to a mass exodus of residents to lower value parts of the country.
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