New plans could soon mean selling your home leaves you with less in your pocket 🏡
- Chancellor Rachel Reeves is considering replacing stamp duty with a new tax on home sales
- Homeowners selling properties worth over £500,000 could face a levy, instead of buyers paying upfront stamp duty
- A £600,000 home sale could mean a tax bill of around £3,240; £1.2m could cost about £8,500
- The plan is aimed at easing costs for buyers, particularly first-time buyers, and could pave the way for wider council tax reform
- Any changes would be announced in the Autumn Budget, expected in late October or early November 2025
Selling your home could soon come with a new tax bill attached, as the Treasury weighs up a radical overhaul of the way property is taxed in the UK.
According to reports, Chancellor Rachel Reeves is “looking at” scrapping the existing stamp duty system – where buyers pay a levy when purchasing property – and replacing it with a tax on sellers of homes worth more than £500,000.
Currently, stamp duty kicks in on properties costing over £125,000, with buyers footing the bill
Under the proposals being considered, this responsibility would shift to homeowners, who would pay a government-set rate when they sell up – but only if their property is worth above the £500,000 threshold.
What could change?
Details remain under discussion, but one model floated by former government adviser Tim Leunig would see a levy of 0.54% on the sale price of homes over £500,000, plus a 0.278% supplement on values above £1 million.
- Selling a £600,000 home could cost you around £3,240.
- A £1.2 million sale could trigger a tax bill of around £8,500.
This would replace stamp duty for buyers of owner-occupied homes. Second homes and buy-to-lets, however, may remain under a separate system.
If Rachel Reeves pushes ahead, homeowners and buyers in England and NI would be directly affected.
But Scotland uses the Land and Buildings Transaction Tax (LBTT), and so changes wouldn’t apply there unless the Scottish Government decided to introduce similar reforms to LBTT.
Why is this being considered?
The move would aim to make it easier for people to buy their first home, by removing one of the biggest upfront costs of moving.
It could also create a model for broader reform, with the possibility of replacing council tax with a property-based levy in the medium term.
What does it mean for you?
If you own a home worth more than £500,000, this change could mean factoring in a tax bill when you eventually sell. While the rate looks lower than stamp duty on equivalent purchases today, sellers may feel the sting of losing a chunk of their proceeds.
Buyers, meanwhile, could find moving less expensive, especially first-timers, who often struggle to save for both a deposit and stamp duty.
When is the Autumn Budget?
Reeves is expected to outline any concrete tax changes at a future Budget. The Autumn Budget 2025 has not been officially scheduled yet, but following tradition, it is most likely to be delivered in late October or early November 2025.
It is broadly expected to fall between October 28 and November 4. For now, homeowners and buyers alike will be watching closely, as this shift could reshape one of the biggest financial transactions of our lives.
