If you are tax planning in Cheshire, the Chancellor Rachel Reeves is rumoured to be considering a new property tax.
The move would affect houses worth over £500,000 as part of a wider overhaul of stamp duty and council tax. Reportedly, the Treasury has been studying how a ‘proportional’ property tax could be implemented and what model it would follow.
At present, stamp duty is payable on homes over £125,000, or £300,000 if you are a first-time buyer. A new levy would affect about 20% of property transactions instead of the current 60%. The set rate would be determined by HMRC and based on the property value. The idea behind the tax is to target the gains made by property owners on the back of increased house prices.
At this moment in time, no final decision has been reached by the government, which has come under pressure to introduce more wealth-based taxes. There are different options open to the Treasury. These include a national property level replacing stamp duty or a locally focused property tax instead of council tax. Any changes to local government tax would take a few years to introduce, given that many tax bands reflect outdated 1990s valuations.
The latest figures show that the average UK house price is now £272,664 (based on July 2025 data). Stamp duty receipts from primary residences raised £11.6 billion last year, and the expectation is that a national property tax would present a more stable source of revenue.
