Is your home about to become a tax target? Rumors of radical property tax reforms, including changes to stamp duty and capital gains tax, are sending shockwaves through the UK housing market. Property expert Phil Spencer warns these could be catastrophic for Londoners and beyond. Will your next move cost you more than you think?

The United Kingdom’s housing market faces potential upheaval as rumors circulate regarding new property tax reforms that could have far-reaching and catastrophic consequences, particularly for ordinary Londoners and the broader economy.

Reports suggest Chancellor Rachel Reeves is considering radical changes, including the potential abolition of stamp duty, the introduction of capital gains tax (CGT) on primary residences valued over £1.5 million, and a national property tax for homes exceeding £500,000.

These proposed measures, according to property experts, are likely to significantly decelerate the UK housing market, creating substantial uncertainty for both buyers and sellers across the country.

For homeowners looking to downsize or sell, the prospect of an unexpected capital gains tax bill could be a major deterrent, locking up valuable London property and exacerbating the existing supply crisis.

Furthermore, the proposed taxation on high-value properties would disproportionately impact London and the South East, areas already grappling with high living costs, potentially triggering an exodus of residents and a sharp decline in property values.

The policy could also severely affect the private rented sector, as landlords, already facing increasing financial pressures, might choose to exit the market, leading to reduced rental supply and increased pressure on both tenants and social housing.

Rather than punitive property tax reforms, experts advocate for solutions that foster a more liquid and accessible homeownership market, such as abolishing stamp duty for first-time buyers or allowing stamp duty payments to be spread over several years.

Implementing such drastic changes without careful consideration and public consultation could lead to market disruption, reduced transaction volumes, and ultimately, a self-defeating outcome for the economy and the housing market.