Stamp Duty Reform: Every Proposal on the Table in 2026

Why Reform Is on the Agenda

Stamp duty land tax has been described by the Office for Budget Responsibility, the IFS, the IfG, and every major economic think tank as one of the most economically distortionary taxes in the UK system. Unlike income tax or VAT, which broadly tax economic activity, SDLT specifically penalises movement, making the housing market less efficient with every transaction it deters.

The housing crisis has added urgency. With housing completions well below target and the existing stock heavily underutilised (large homes occupied by empty-nesters who cannot afford to downsize), the pressure to reform a tax that directly impedes reallocation has intensified.

For the full history of how stamp duty rates have evolved, see our stamp duty history guide. The reform debate has intensified since the April 2025 threshold changes pushed more buyers into higher bands, with current rates now representing the highest effective burden in decades.

Where Things Stand: Summer 2026

Updated 12 July 2026.

Since this guide was first published in March 2026, the reform debate has moved from think tanks into Parliament, without yet changing a single rate. Three developments matter.

• The Spring Statement passed without reform. Rachel Reeves left SDLT untouched in March 2026, as covered in our Spring Statement analysis.
• Parliament joined the reformers. On 9 June 2026 the cross-party Housing Committee recommended a Government consultation on alternatives to SDLT before the end of 2026, paired with council tax reform. The Government's formal response is awaited.
• The mansion tax is being designed, and possibly widened. The consultation on the High Value Council Tax Surcharge closes on 14 July 2026, while reports suggest the £2m threshold could later fall to £1.5m, catching around 150,000 more homes.

With the Autumn Budget 2026 approaching, the familiar summer speculation cycle has restarted: the Treasury's seller-paid £500k property tax (covered below) is back in circulation, and reports of buyers pausing high-value purchases echo the hesitancy that dented transactions before the 2025 Budget. Nothing has changed in law. Every rate and threshold on this page remains as set in April 2025.

Conservative Abolition Proposal

The Conservative Party's October 2025 pledge to abolish SDLT on homes up to £300,000 is the most concrete mainstream reform proposal currently before Parliament. Leader Kemi Badenoch framed it as a housing mobility and aspiration measure targeted at buyers outside London and the South East.

A key distributional finding: because 60% of SDLT revenue comes from properties in southern England where values typically exceed £300,000, the Conservative proposal would deliver most benefit in the Midlands and North. This creates a regional equity tension: the areas where housing is most unaffordable (London, South East) see the least benefit.

Treasury £500k Threshold Tax

Separately from the Conservative proposal, the Treasury is reported (by The Guardian and Financial Times) to be examining a simpler replacement: a flat-rate transaction tax only on the portion of property value above £500,000. This would effectively exempt the vast majority of transactions while retaining revenue from the upper end of the market.

Under this model, a buyer purchasing a £300,000 property would pay nothing. A buyer purchasing a £700,000 property would pay 4-5% on the £200,000 above the threshold: £8,000-£10,000. Compare this to current SDLT of £22,500 on the same property, a significant reduction.

Use our stamp duty calculator to calculate your current liability and compare it against these proposed models.

IPPR Proportional Property Tax

The Institute for Public Policy Research (IPPR) has proposed replacing stamp duty entirely with an annual proportional property tax of approximately 0.5% of property value. This would shift property taxation from a transaction basis to a holding basis, fundamentally changing the economic incentives.

IPPR estimates this reform could free 600,000 homes within five years as older homeowners who previously could not afford to downsize find the annual charge (on a smaller property) preferable to maintaining their current home. The Autumn Budget 2025 went a step further, introducing a High-Value Council Tax Surcharge on properties over £2 million from April 2028, a separate recurring levy distinct from any SDLT reform. The government did not adopt any stamp-duty replacement model at that Budget, so a proportional property tax remains a proposal rather than policy as of mid-2026.

Land Value Tax

Land value tax (LVT) taxes the underlying land rather than the buildings on it. Because land is fixed in supply, taxing it does not distort behaviour in the same way as transaction taxes. LVT is supported by the Liberal Democrats and Green Party, and has broad academic backing from across the political spectrum.

International models:

• Denmark: Land component of property tax has existed since 1922. Land is taxed separately from buildings, at higher rates. Danish land markets are notably stable and efficient compared to UK.
• Estonia: Reformed towards LVT in the 1990s post-Soviet transition. Tax on land value with no tax on buildings. Seen as successful in encouraging development and efficient land use.
• Australia: State-level land taxes operate alongside stamp duties. New South Wales and Victoria have active political campaigns to replace stamp duty with land tax. Some Australian states have begun piloting hybrid systems.

The Fairer Share 0.48% Proportional Property Tax

This is the model most often linked to Andy Burnham, who backed the Fairer Share campaign before taking office. It would abolish both council tax and stamp duty and replace them with a single annual charge of 0.48% of a property's value, rising to 0.96% for second homes, empty properties and homes owned by overseas buyers. Because the charge is annual and falls on the owner, it converts a one-off cost at purchase into a recurring liability for as long as you hold the home.

It is a proposal, not policy. On 27 July 2026 Downing Street called reports that the government was actively considering it “not true” and “pure speculation”, and the Prime Minister ruled out stamp duty changes at the autumn Budget. See our analysis of what the Burnham government means for stamp duty.

The Cost of Speculation Itself

One point recurs across almost every industry response, and it applies whichever proposal eventually wins: sustained speculation about stamp duty damages the market even when nothing changes. Buyers and sellers postpone decisions while they wait to see whether a better deal is coming.

There is a recent precedent. Through the months of speculation before the November 2025 Budget, London house prices fell at their fastest rate since the financial crisis, and in the end that Budget left stamp duty untouched.

Tony Blair Institute Loan Model

The Tony Blair Institute for Global Change proposed a different approach: do not abolish stamp duty, but change when it is paid. Under the TBI model, buyers would take a government-backed loan for their SDLT liability and repay it over 10-15 years with interest. The government retains all revenue; buyers lose only the upfront payment barrier.

Resolution Foundation Phased Reform

The Resolution Foundation, a leading UK social policy think tank, advocates a phased approach that avoids the political difficulty of one-shot reform while achieving structural change over a Parliament.

What the Evidence Says

The academic literature on stamp duty is unusually unified: SDLT is economically inefficient, and reform would improve welfare. But the evidence also contains important cautionary findings about how reform is implemented.

Scotland & Wales: Devolution Lessons

Scotland and Wales have already replaced stamp duty with their own property tax systems, providing real-world evidence of how devolved property taxes operate in practice. Both systems are more progressive than England's SDLT, and both have introduced higher additional-property surcharges.

Key lessons from devolution:

• Both Scotland and Wales generate less property tax per capita than England, partly reflecting lower average property values and partly different rate structures.
• Cross-border arbitrage has been limited. Despite different thresholds, buyers do not generally relocate across borders to exploit tax differences, suggesting the rate differential is not the primary driver of location decisions.
• Scotland's ADS has been raised twice (to 6%, then 8% from December 2024), suggesting devolved governments are willing to use property taxes more aggressively than Westminster.