It was reported in The Guardian yesterday that Chancellor Rachel Reeves was mulling the idea of replacing stamp duty with a tax on homes worth over £500,000.
Figures from Rightmove show that in England, the proportion of homes for sale over £500,000 stands at 30%, but this goes up to a high of 59% in London.
Colleen Babcock, Rightmove’s property expert, said stamp duty was a “huge barrier to movement”, from first-time buyers to downsizers.
“We recently called for an increase to the zero-rate thresholds at which first-time buyers and homemovers start paying stamp duty and backed a suggestion from one of our agent partners that stamp duty should be paid over a longer time period.
“If changes are brought in that make home moving genuinely more affordable for people, then we would welcome them, but without firm details, it remains to be seen if a different type of taxation would leave property owners better or worse off in the long run,” she said.
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| Region | Proportion of homes for sale that are over £500,000 |
| East Midlands | 14% |
| East of England | 29% |
| England | 30% |
| London | 59% |
| North East | 8% |
| North West | 15% |
| South East | 39% |
| South West | 28% |
| West Midlands | 18% |
| Yorkshire and the Humber | 13% |
Source: Rightmove
Nick Jones, mortgage sales and marketing director at Access FS, said stamp duty is a “regressive tax” and people with homes worth less than £500,000 will be “rejoicing at these proposed changes – along with many economists”.
“Stamp duty adds expense to the already costly bill when people buy or sell homes. It hits hard when you are trying to relocate. It’s a tax on mobility [that] limits Britain’s economic efficiency. And not only does it penalise people who have saved enough to buy a home but now need to upsize or to relocate for work – it encourages older homeowners to stay put in larger homes, even though their children have long flown the nest.
“I won’t be sorry to see the back of it. The question of what might replace it is more thorny – but it doesn’t seem crazy to refresh the outdated 1991 valuations currently used as the basis for our council tax calculations,” he noted.
Sonya Matharu‑Coxill, founder and adviser at The Mortgage Atelier, said stamp duty is “one of the biggest barriers to a healthy housing market”.
“It penalises movement, whether you’re a first-time buyer, a growing family, or someone looking to downsize. I understand the intention behind shifting the burden to sellers, but in practice, it risks discouraging exactly the kind of supply we need,” she said.
Matharu-Coxill said that if stamp duty wasn’t scrapped entirely, then the housing market would need a “smarter, well-considered alternative, one that supports mobility and recognises that rising property values don’t always translate into real, accessible wealth”.
| Region | Average asking price (August 2025) | Stamp duty paid by a homemover based on average asking price | Stamp duty paid by a first-time buyer based on average asking price |
| East Midlands | £291,440 | £4,572 | £0 |
| East of England | £420,729 | £11,037 | £6,037 |
| London | £666,983 | £23,350 | £23,350 |
| North East | £194,799 | £1,396 | £0 |
| North West | £268,393 | £3,420 | £0 |
| South East | £479,634 | £13,982 | £8,982 |
| South West | £380,492 | £9,025 | £4,025 |
| West Midlands | £295,863 | £4,794 | £0 |
| Yorkshire and the Humber | £253,762 | £2,689 | £0 |
Source: Rightmove
Stamp duty overhaul could be ‘one of the most significant housing reforms in a generation’
Sam Kirtikar, CEO of The Mortgage Broker, said “any overhaul of stamp duty and potentially council tax could be one of the most significant housing reforms in a generation”.
He continued: “It is too early to say exactly how I think it should look, but if approached carefully, reform could tackle three long-standing issues. The first being outdated systems. Both stamp duty and council tax are inconsistent and no longer reflect today’s housing market.
“Council tax still relies on 1990s property valuations, while stamp duty revenues rise and fall unpredictably with transaction volumes. A well-designed property-based tax could provide greater stability.”
Kirtikar added that the “barrier to mobility” was another issue, as stamp duty was a “major deterrent to people moving home”.
“Families who want to upsize or downsize often decide against it because the cost of tax is too high. This restricts housing supply and slows the natural flow of the property ladder,” he noted.
Another key issue was “regional fairness”, as flat thresholds would “unfairly penalise households in high-cost areas”.
“In London and the South East, a £500,000 property may represent a modest family home, while in many other regions, it would be considered a high-value property. Without recognising these regional differences, reform risks locking families out of the market in expensive areas while failing to deliver fairness nationally,” he added.
Kirtikar said an “unintended consequence” of a new property tax could be a rush to sell in higher-value areas before the changes come into force.
“For many owners, properties valued above £500,000 are not luxury assets but family houses/flats with large mortgages. If homeowners fear being trapped with an additional sales tax, we may see the already significant outflow from London accelerate further.
“I would support reform that forms part of a broader effort to modernise an outdated tax system. If structured well, it could stimulate the housing market while giving the government a more consistent revenue stream. However, it must protect first-time buyers and avoid penalising ordinary families who either live in high-value regions or simply want the freedom to move home,” he said.
