UK Treasury weighs national property tax to replace stamp duty

The Treasury is examining a broad shakeup of property taxes ahead of the autumn Budget, weighing plans that could replace stamp duty with a national property tax on owner-occupied homes worth more than 500,000 and, in the longer term, substitute council tax with a local property levy. There is no final decision yet, but officials have been told to model how such reform would work and its potential impact on revenues, growth and households across the country. The driving aim, officials say, is to strengthen public finances while safeguarding working people from tax rises.

Under one option, a national proportional property tax would apply to sales of homes above the 500,000 threshold, with rates set by the government. Proposals being discussed would see the levy scaled so that properties between 500,000 and 1,000,000 are taxed at about 0.54% and properties above 1,000,000 at higher rates, with annual adjustments to reflect inflation. The plan would replace stamp duty for primary residences but would not affect stamp duty on second homes. A separate, longer-term step could be a local property tax to replace council tax, paid by property owners rather than residents, using a...