HMRC is considering plans to raise money from a tax on the sale of homes worth more than £500,000, according to reports.
Government officials are looking at a potential national property tax, which would replace stamp duty on owner-occupied homes to start with, and Council Tax in the medium term.
No final decision has been made, but it is thought this national tax could help build a model for taxation, and the threshold discussed is believed to be £500,000.
How would it replace Stamp Duty?
Buyers pay stamp duty under the existing framework, if they purchase property worth more than £125,000.
The new levy would be paid by owner-occupiers on houses worth more than £500,000 when they sell their home, with the amount due determined by the value of the property and a rate set by the Government.
A Treasury spokesperson said: “As set out in the plan for change, the best way to strengthen public finances is by growing the economy – which is our focus.
“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8 billion and cut borrowing by £3.4 billion.
“We are committed to keeping taxes for working people as low as possible, which is why at last autumn’s budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee national insurance, or VAT.”
Chancellor Rachel Reeves will unveil any changes to the Government’s tax policy at a fiscal event, such as a budget.
Sir Mel Stride, Conservative shadow chancellor, said: “The Conservatives have warned that more taxes are coming and now reports are emerging that the family home is next in the firing line.
“This tax grab would punish families for aspiring to own their own home.”
When will Rachel Reeves start talking about saving money not just finding more & more ways of taking money away from people who themselves have bothered to save and work hard?
— Kirstie Allsopp (@KirstieMAllsopp) August 19, 2025
Any moves to increase taxation have also been criticised by property presenter Kirstie Allsopp, who tweeted: "When will Rachel Reeves start talking about saving money not just finding more & more ways of taking money away from people who themselves have bothered to save and work hard?"
Michelle Lawson, Director at Fareham-based Lawson Financial, admitted an overhaul to stamp duty is needed - but “this is not it”.
She added: "Everyone or nobody pays otherwise you create another division and another cliff edge, namely the £500k mark. Short-sighted tax grabs will be a disaster and will end up generating less rather than more.
“To increase the tax coffers, Reeves needs to charge less, charge everyone and scrap or reduce the crippling Section 24 additional property tax. An ignition of the property market will spark the economy, generate jobs and further increase tax receipts.”
Chris Barry, Director at London-based Thomas Legal, agreed, adding: "Stamp duty 100% needs reform, I don’t think there is a debate to be had on that front. It was originally introduced as a tax on high value homes and now impacts most people.
"Tax incentives throughout history have moved the market more than Brexit, war, Covid and interest rates so this has to be the answer to give the market some life. Stamp duty breaks in recent years have been shown to bring in far more by way of tax receipts through VAT and wider economic growth as market volumes shoot up.
“It makes sense to remove stamp duty to a level that will provide a much-needed incentive for buyers. The alternative solutions are unclear but the Chancellor needs to be careful when taxing investment properties and second homes as this makes up approximately one third of the overall market and renters are already experiencing strain on rising prices.”
Mumsnet posters have also expressed their concerns, especially those living in the south east, where property prices are higher.
"Surely this will force people either to never move, or move away from the South East and London," said one poster.
"I'm glad that there is finally something that isn't negatively affecting areas outside the South East but does she (Rachel Reeves) actually understand that £500k isn't much down here - a 3 bed terrace, at best."
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Another added: "I was thinking it would need to be something that takes into account regional differences in house prices, then I realised we already have something like that - Council Tax."Others agreed that Council tax should be replaced: "Council Tax is a joke - in my village two new builds opposite each other 4 bed sold £850k put in band F and other 5 bed worth sold £750k put in band G, bungalow turned into a house recently sold for 1.25 million still in Band E. All should be band G."
Some have embraced the idea, saying: "As someone who would be impacted by this, I don't think it's terrible. They have property taxes in lots of other countries and our Council Tax is based on completely outdated values."
Another London-based poster said: "It’s a pretty good idea. Wealth is under taxed, Council Tax is now regressive and the government need ££. I just hope it happens and isn’t watered down to be ineffective. I live in London, by the way."
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