Overview

• Senior Treasury ministers have instructed officials to model implementation options for a national proportional property tax on owner-occupied homes
• The levy would apply when owner-occupiers sell homes valued above £500,000 with centrally set rates and proceeds collected by HMRC
• Second homes would continue under the existing stamp duty regime and would not be subject to the new levy
• Officials are exploring a medium-term local property tax to replace council tax, though that overhaul is expected to extend beyond one parliamentary term
• Officials are drawing on Tim Leunig’s Onward report and navigating internal Labour pressure to shift tax burdens without penalising working households