Is Stamp Duty Going to Change? Here’s What we mutterings we have heard so Far

Stamp Duty (formally Stamp Duty Land Tax, or SDLT, in England & Northern Ireland) is a big cost in many property transactions, especially in higher-value markets. For many people buying, selling or advising on mortgages, the key question now is: Will stamp duty be scrapped or reformed? And if so, when and how?

We at Stuart Brown Mortgage Services understand these changes could significantly affect the cost of moving home, borrowing and property affordability. Below is a detailed, up-to-date guide on where the proposals are, what might change and what that could mean for you.

What Is Stamp Duty – Why Are People Talking About Changing It?

Before diving into proposals, let’s ground ourselves in what Stamp Duty currently is, the problems people see with it, and why the government is considering change.

What Is Stamp Duty / Stamp Duty Land Tax (SDLT)?

• Who pays it: Traditionally, the buyer of a residential property pays SDLT when the purchase price exceeds certain thresholds. In England and Northern Ireland.
  
• How much: Rates are tiered: different bands depending on price. There are also different rules or reliefs for first-time buyers.
  
• Recent thresholds: As of April 2025, thresholds have been lowered, this is the updated rates: 

Current Stamp Duty Rates

Up to £125,000 – 0%

The next £125,000 (the portion from £125,001 to £250,000) – 2%

The next £675,000 (the portion from £250,001 to £925,000) – 5%

The next £575,000 (the portion from £925,001 to £1.5 million) – 10%

The remaining amount (the portion above £1.5 million) – 12%

*correct at point of writing 21/1/2026

Why Is Stamp Duty Under Pressure?

Stamp duty has been causing the following concerns:

• Upfront cost barrier: Buyers must have the funds not only for deposit and mortgage but also to cover the stamp duty, which can be thousands of pounds.
  
• Market inefficiencies: The banded/thresholded nature of SDLT can lead to “cliff edges.” For example, a small increase in price can lead to a large jump in tax.
  
• Regressivity / unfairness, especially in high-property areas: those who buy more expensive homes, or in expensive regions like London/South East, get disproportionately hit.
  
• Revenue volatility: SDLT revenues swing with property markets, which makes government budgeting less predictable.

What Are the Proposed Stamp Duty Changes?

There are currently no final decisions, but there is quite a bit of serious consideration and public reporting on several models. Below are the main proposals being discussed  and why they matter.

Proposal	Key Details	Pros	Cons / Risks
National Proportional Property Tax Replacing SDLT	Proposed tax on high-value (e.g. £500k+) owner-occupied properties, paid by the seller, proportional to value and potentially phased in over time.	Shifts cost from buyers to sellers, making purchases easier, with smoother rates, steadier government revenues  and improved market mobility.	Higher costs for sellers in expensive markets (e.g. London/South East), with risks of price pass-through, transitional challenges and political sensitivity around taxing wealth.
Local Property Tax to Replace Council Tax	National property tax replacing council tax, based on updated property values, paid by owners (with possible minimums), funding local authorities directly.	Fairer, more transparent system aligned with current property values, providing councils with more stable funding.	Politically sensitive transition, with risk of higher bills for long-term owners of valuable properties.
Adjustments / Removal of Reliefs or Thresholds	Potential cuts to buyer and property reliefs, with possible CGT on high-value main homes and limits on private residence relief.	Incremental changes targeting high-value property to reduce inequality and simplify implementation.	Risks higher homeowner costs, reduced market activity near thresholds and ongoing complexity.

What We Know So Far: Facts & Status

Here’s what is more confirmed vs what is still speculative:

Confirmed / Strong Signals

• Thresholds have already changed (April 2025): SDLT “free” band for main residences dropped to £125,000 (from £250,000)  and first-time buyer reliefs have been reduced.
  
• Treasury is actively exploring replacing SDLT with a proportional property tax for homes sold over £500,000.
  
• That tax could (maybe) be paid by sellers of high-value homes, not buyers, for owner-occupied homes.
  
• No decision has been made yet, proposals are being modelled and debated. Implementation could occur during this Parliament (i.e. before the next election) for the national tax.
  

Still Speculative / Unclear

• What exact rates would be: Some sources suggest rates around 0.54% annually for values above £500,000, with perhaps a supplement above £1 million.This is not confirmed.
  
• How thresholds might work: Whether £500,000 is a “hard” threshold, whether there are regional adjustments.
  
• Transition arrangements: Who is protected, who might face double taxation, timing, etc.
  
• Effect on non-owner-occupied properties / investment homes and second homes: Current reports suggest that new tax would apply only to owner-occupied homes, at least initially.

How Would This Affect Different Stakeholders?

Understanding these proposals can help you anticipate how they might change what you do (move, mortgage, buy, sell). Here are likely impacts by group.

Stakeholder	Likely Gains	Likely Challenges / Cost Increases
Buyers / First-time Buyers	Reducing/removing SDLT under £500k lowers upfront costs, eases moving and adds predictability.	Risks of higher asking prices, transitional uncertainty and reduced SDLT reliefs.
Homeowners Selling High-Value Homes (over threshold)	A reasonable rate could make the tax an accepted part of selling, creating a more transparent and predictable system.	Seller tax increases sale costs, needs planning and may dampen high-end market demand or values.
Mortgage Advisors / Mortgage Applicants	A new SDLT regime could alter loan needs, free up funds for deposits or costs and simplify client advice.	Short-term complexity may delay moves, create volatility and require lenders to adjust cost assessments.
Government / Treasury	Provides fairer, steadier revenues, avoids cliff edges, and eases burdens on lower-value movers.	Risks include political backlash, administrative complexity and possible revenue shortfalls if sales or values drop.

Will Stamp Duty Be Scrapped? Probably Not Completely

A common recent question is: Is stamp duty being scrapped entirely? The evidence suggests that while sizable reform is very likely, an immediate complete scrapping is unlikely. Key points:

• The proposed changes are targeted (homes above a certain value, owner-occupied). Many transactions (below thresholds) may remain untouched.
  
• Some variants propose replacing SDLT only on owner-occupied homes initially, not second homes or investment properties.

So “scrapped” is probably too strong a term,  more likely “reformed” or “partially replaced.”

What Are the Latest Stamp Duty / Property Tax Rates & Reliefs (Current)?

To compare what might come vs what is in place now, here’s a snapshot of Stamp Duty thresholds and rates (England & Northern Ireland) as of recent changes, which people use as reference.

Category	Threshold / Relief	Notes
Main residences, non-first-time buyers	0% SDLT on first £125,000 of purchase price (as of April 2025)	Previously this was £250,000
First-time buyers	Relief up to £300,000, with £500,000 cap for some reliefs.	But reliefs reduced from former higher thresholds
Stamp duty scale / rates above thresholds	Multiple bands above the zero rate threshold. Rates increase according to purchase price. (E.g. 5%, 10%, 12% etc for higher bands)	These rates and bands remain quite steep in many areas

These are the reference points people are comparing the proposed rates to.

What New Stamp Duty Rates Might Look Like Under the Proposed Changes

As noted above, some think tanks (notably Onward) have put forward models. If adopted, one possible structure under discussion:

• Homes sold for £500,000-£1 million: proportional tax perhaps around 0.54% or somewhere in that ballpark.
  
• Higher homes (above £1 million): possibly higher supplement or stepped additional rate.
  
• Possibly rates adjusted by region (e.g. London vs other areas), though that is less certain.
  
• Some proposals suggest the payments could rise annually (or be indexed by inflation) – important for sellers to consider.

Timing: When Could These Changes Happen?

• A national property tax replacing SDLT could be implemented during this Parliament. That means perhaps within 1-3 years from now, depending on political will and legislative process.
  
• Replacement of council tax or introduction of local property tax is likely further out, probably needing another term to fully phase in.
  
• Autumn Budget 2025 is seen as a key moment: proposals will be modelled, maybe partially set out, though full details may not be in that Budget.

What Should You Do Right Now? Advice from Stuart Brown Mortgage Services

Given the proposals, here’s what people moving home, considering buying or selling and those advising (like us) should think about doing now.

1. Get up-to-date on your situation
   
   • If you’re buying, find out what stamp duty you would pay now under current rules. Include first-time buyer relief if relevant.
     
   • If you own a higher-value home, run scenarios under proposed rates (if that £500,000 threshold applies) so you can estimate what your sale might cost under the new tax.
     
2. Consider timing
   
   • If you are thinking of buying or selling, check whether acting before reforms are implemented makes financial sense. For example, if SDLT is likely to be replaced by seller tax, you may prefer to sell beforehand.
     
   • Conversely, buyers might be cautious. If SDLT is lowered or removed for certain cases, waiting could save you money, but risk if prices rise or rules change.
     
3. Budget for uncertainty
   
   • Because nothing is certain yet, it’s sensible to leave some buffer in your financial plans (mortgage, moving costs, legal fees) in case tax changes increase your cost unexpectedly.
     
4. Talk to professionals
   
   • Mortgage brokers, tax advisors, conveyancers: as proposals firm up, the details will matter. At Stuart Brown Mortgage Services, we can help model these scenarios.
     
   • Keep an eye on Autumn Budget announcements (November 2025), that’s a likely turning point.
     
5. Understand regional differences
   
   • In high-price areas (London, South East etc.), property values often exceed thresholds, so potential tax burdens might be higher. Those markets may react differently.
     
   • If you’re not in a high-value area, you may see fewer direct effects, but that also means national averages might mask discrepancies.

Bottom Line: What We Think Will Happen

Here’s what seems most plausible based on current evidence:

• The UK is likely to reform Stamp Duty, especially for higher-value owner-occupied homes. It is unlikely to simply keep things as they are.
  
• A national proportional property tax (seller-paid above a threshold, perhaps -£500,000) is one of the leading proposals.
  
• Many lower and middle-value transactions will probably be less affected (some might benefit), especially if thresholds are preserved or reduced reliefs are phased in carefully.
  
• Full replacement of SDLT in all its current form is unlikely in the short term, but over the medium term, we may see significant shifts.
  
• The Autumn Budget 2025 will likely provide more clarity.  Legislative draft might follow, with implementation phased.

Will These Changes Be Good or Bad?

In many ways, reform of Stamp Duty is overdue. But it’s not a question of good vs bad. It depends a lot on your particular position. Here are pros/cons in summary.

Potential Upsides

• Lower barriers for moving home, fewer upfront costs, more flexibility.
  
• Simpler, more predictable system.
  
• Fairer distribution of tax burdens (for many), especially if the threshold excludes more modest homes.
  
• More stable revenue for the government.
  

Potential Downsides

• High-value homeowners (or sellers) will likely face new taxes.
  
• Risk that sellers increase asking prices to compensate, putting pressure back on buyers.
  
• Uncertainty in transition could slow transactions temporarily.
  
• Political controversy, people dislike surprises in tax, especially property-owners.

Stuart Brown Mortgage Services are Here to Help

Need expert guidance on Stamp Duty or the latest mortgage rules? At Stuart Brown Mortgage Services, we keep up to date with every change in property tax and lending criteria so you don’t have to. 

Whether you’re a first-time buyer, moving up the property ladder or considering selling a high-value home, our friendly team can walk you through your options and make sure you’re financially prepared. Get in touch today for clear, tailored advice and a mortgage solution that works for you.