Potential Property Tax Reforms in the 2025 Budget

by Aaron Strutt

Aug 24 2025

According to multiple reports, the Chancellor is exploring a suite of property-focused tax reforms in the run-up to the upcoming Autumn Budget:

• Replacing Stamp Duty: There's discussion about scrapping stamp duty on primary residences and instead introducing a national, proportional property tax on homes valued over £500,000, to be paid upon sale by the seller. This aims to modernise the current system and yield a more predictable revenue stream.

• Reforming Council Tax: In the longer term, the government may also overhaul or replace outdated council tax schemes—some based on 1991 valuations—with a local property tax model, potentially phased in over a second Labour term.

• Capital Gains Tax Changes: Reports suggest the Chancellor may remove CGT exemptions for primary home sales above approximately £1.5 million, effectively introducing a form of “mansion tax.”

• Taxing Rental Income: A potentially significant development: applying National Insurance (NI) to rental income—a move not previously made—and expected to raise around £2 billion, targeting "unearned income" from landlords.

While the government is clearly trying to balance the books, it is unlikely homeowners and landlords will welcome many of these changes, and if they are implemented, there could be some big implications for the property market.

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The information contained within was correct at the time of publication but is subject to change.

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