There’s talk in Westminster about tearing up the current stamp duty system and replacing it with an annual property tax. If it happens, the way we buy and sell homes in England will look very different.
Right now, the buyer takes the hit: stamp duty is paid in one lump sum on completion, often running into tens of thousands. Under the new model, the burden would move to the seller. Instead of one big payment, it would be a recurring annual charge on homes worth over £500,000. Early figures suggest a rate of around 0.54% on the portion above that threshold.
To put it into perspective, a buyer of a £650,000 home today would pay roughly £22,500 in stamp duty upfront. Under the proposed system, the seller would instead face an annual bill of about £810.
The winners and losers will depend on your position. First-time buyers could find the upfront cost of home ownership less intimidating. Sellers, especially downsizers, could see more of their equity chipped away. And the impact won’t be felt equally across the country: in London and the South East, where more homes sit above the £500,000 mark, this change would bite hardest. Meanwhile, owners of second homes and buy-to-lets are likely to remain under the existing rules.
Alongside this, the government is also floating other reforms — from reworking council tax into a new local property levy, to increasing capital gains exposure on properties over £1.5 million. Whether these proposals ever reach the statute books is another question, but the direction of travel is clear: property taxation is under review, and change is coming.
At Godstone Law, our view is straightforward. Buyers and sellers deserve clarity, not uncertainty. Until anything is confirmed, the only sound strategy is to move forward under today’s rules, while keeping one eye on the horizon. Our role is to stay ahead of these shifts so our clients don’t have to.
When the rules change, you’ll hear it from us first — and you’ll know exactly how it affects your move.
