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2h ago

Treasury Studies National Property Levy to Replace Stamp Duty on Homes Over £500,000

Officials cite volatile receipts alongside disparities from 1991‑era council tax bands.

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Stamp duty raised £13.8bn in 2024-25 but has been criticised for discouraging movers
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Overview

  • Senior ministers have ordered modelling of a centrally set proportional property tax ahead of the autumn budget, with no decision taken.
  • Under the option being studied, owner‑occupiers would pay the levy on sale for homes valued above £500,000, with HMRC collecting the proceeds, and stamp duty on second homes would remain.
  • A national levy could be introduced within this parliament, while any move to replace council tax with local property charges would take longer and likely require a second term.
  • The measure would affect roughly a fifth of transactions versus about 60% under current stamp duty, with the UK average house price around £272,664 and London near £550,000.
  • The work draws on Onward’s proposals that include example rates reported by The Times, which are illustrative rather than government policy, and has prompted pressure from Angela Rayner for wealth‑based levies alongside Conservative criticism.