The Caprons, Lewes, East Sussex

This Grade II-listed Georgian house in the centre of Lewes was once home to historian Asa Briggs, who was also a Bletchley Park code breaker. The garden includes a Grade-II listed, octagonal summer house. 5 bedrooms, 4 bathrooms, 3 reception rooms, kitchen, cellars, roof terrace, walled garden.

Price: £2.1m Jackson-Stops 01444-484400

Broomshields Hall, Satley, Bishop Auckland, County Durham

A Grade II-listed Georgian house with gardens that include a one-bedroom cottage, two summer houses and a lake. The house has a carved oak staircase and a large kitchen with an Aga. 4 bedrooms, 4 bathrooms, 3 reception rooms, library, 18 acres.

Price: £1.75m Finest Properties 0330-111 2266

The Manor House, Great Harrowden, Northamptonshire

A Grade II-listed manor house in a popular village, set in south-facing gardens with a kitchen garden with a greenhouse and a circular summer house with sofas and a fridge for wine. The house has beamed ceilings, panelled walls and period fireplaces. 6 bedrooms, 4 bathrooms, 3 reception rooms, breakfast kitchen, attic, pond, 0.8 acres.

Price: £1.15m Fine & Country 01604-309030

The Court, Axbridge, Somerset

A Grade II-listed Georgian house in Axbridge with views towards Glastonbury Tor. The house is set in gardens that include a summer house and an area dedicated to archery. It has flagstone and oak floors, period fireplaces and an indoor swimming pool with a gym. 7 bedrooms, 5 bathrooms, 3 reception rooms, breakfast kitchen, garden room, cinema, courtyard, parking, walled gardens, kitchen garden, 1.15 acres.

Price: £2.395m House & Heritage 01257-441990

Orchard Cottage, Wood End, Ardeley, Hertfordshire

A Grade II-listed, 17th-century house comprising three original cottages, with a summer house with a wood-burning stove and Wi-Fi. The house has exposed wall and ceiling timbers and inglenook fireplaces. 4 bedrooms, 2 bathrooms, reception room, gardens, 0.75 acres.

Price: £1.15m Fine & Country 01920-443898

Polwarth Terrace, Merchiston, Edinburgh

A duplex apartment on the first floor of a period property in the sought-after area of Merchiston. The flat retains its period fireplaces and has a dining room with French doors opening onto a balcony and a spiral staircase leading to a garden with a summer house. 6 bedrooms, 3 bathrooms, reception room, office/bedroom 7, dining kitchen, garage, summer house, parking.

Price: £985,000+ Savills 0131-247 3770

Moreves Manor, Great Waldingfield, Sudbury, Suffolk

A Grade II-listed, 17th-century house set in large gardens that include a wildlife pond and a summer house complete with a shower, sauna and wood-burning stove. The house has exposed wall and ceiling timbers and a breakfast kitchen with an Aga. 6 bedrooms, 2 bathrooms, 2 reception rooms, office, garden room, outdoor swimming pool, 1.58 acres.

Price: £950,000+ Strutt & Parker 01473-220444

Heamoor, Penzance, Cornwall

A renovated, Grade II-listed Cornish long house set in landscaped gardens with a tree house, an orangery overlooking the kitchen garden and a summer house that is used as a pottery studio. The house has Georgian sash windows, open fireplaces and a newly fitted kitchen with French doors leading onto the gardens. 4 bedrooms, 4 bathrooms, 3 reception rooms, study, utility with en-suite shower, workshop, paddock, stable block, 2.5acres.

Price: £1.2m Savills 01872-243 200

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Property buyers are being urged to ensure they declare and pay the correct stamp duty or face potentially thousands of pounds in fines as HMRC almost doubles its investigations into property transactions.

Stamp duty land tax (SDLT) investigations rose 88% in the 12 months to 5 April 2025, jumping to 3,035 up from 1,617 in the same period in 2024, a Freedom of Information request to HMRC by accountants and business advisors Lubbock Fine shows.

The crackdown led to an extra £200 million in tax being recovered, up from £85 million in 2023/2024, an increase of 135%.

An HMRC spokesperson told MoneyWeek the increase is due mainly to increased scrutiny of “rogue repayment agents offering to make SDLT repayment claims” for homebuyers.

“If a claim is inaccurate, people could end up paying more than the amount they were trying to recover,” they said.

Why are stamp duty investigations rising?

HMRC has seemingly intensified its scrutiny of property deals following the increase in additional SDLT rate for second properties from 3% to 5% in the October 2024 Budget.

The increase has created a greater financial incentive for purchasers of a second property to mislead HMRC and to claim that they do not own another home, something HMRC is believed to be mindful of, that could also lead to more investigations.

The increased complexity of the SDLT regime is another factor causing more people to make mistakes when declaring their taxes, upping the risk of being investigated by HMRC as a result, according to Lubbock Fine.

Lubbock Fine warns that as the penalties can reach tens of thousands of pounds, people should seek professional advice to avoid making costly mistakes.

Graham Caddock, director at Lubbock Fine, said: “With SDLT rules becoming increasingly complex and constantly changing, people are far more likely to make mistakes. Errors can be very expensive."

The public attention around Angela Rayner’s underpayment of SDLT is also expected to increase the number of investigations carried out by HMRC.

Caddock said: “After the recent public attention around the Angela Rayner case, HMRC is likely to step up its scrutiny on second property acquisitions.”

Rayner, the now-former deputy prime minister and housing secretary, was caught underpaying stamp duty on her £800,000 seaside flat, and was forced to step down.

Why would HMRC investigate stamp duty claims?

HMRC would investigate stamp duty transactions if it was suspicious the property buying and selling activities didn’t match up and so the correct tax hadn’t been paid.

According to Lubbock Fine, some HMRC investigations have involved:

• Buyers falsely claiming they are replacing their main residence to avoid the SDLT surcharge on purchasing additional properties.
• Buyers transferring their home into a trust or to their partner before buying another property, which HMRC does not treat as valid grounds for avoiding the surcharge.

Caddock said: “HMRC looks at many different factors to decide what counts as your main residence. Whether a property has been transferred into a trust or a partner doesn’t necessarily carry much weight with HMRC.”

Many stamp duty investigations involve buyers wrongly assuming a property with some commercial use, such as self-contained rental flats, qualifies for a lower stamp duty charge, according to Lubbock Fine. However, that is only true in very limited circumstances.

To qualify, the commercial parts must be clearly separate, unsuitable for normal living, and the commercial activity ongoing when the property is bought.

Caddock said: “Many people wrongly assume that if a house has some commercial use, they can claim a lower SDLT. But if the property is still clearly suitable to live in, or if the commercial part isn’t properly separated, HMRC is likely to challenge that status.

“Similarly, if the commercial element of the property has only been added recently, HMRC is likely to claim it isn’t genuine and has been set up purely to obtain a tax advantage. That can end up costing people large penalties.”

‘Bogus’ claims for stamp duty refunds

The taxman has also been cracking down on what it describes as ‘bogus’ claims for stamp duty refunds. This where the buyer claims a property is not a residential home because it needs repairs and is not inhabitable.

HMRC is warning people purchasing properties to be vigilant of tax agents offering to secure stamp duty repayments on their behalf where a property they have bought needs repairs.

The taxman said it is “taking decisive action on spurious SDLT repayment claims”, using civil and criminal powers to deal with the minority who undermine the tax system.

Some tax agents have suggested that, for a fee, they can reclaim SDLT the buyer has already paid by saying that the property is non-residential because it’s uninhabitable, according to HMRC.

But making claims of this kind often leave the homeowner liable for the full amount of stamp duty, plus penalties and interest.

A recent Court of Appeal judgment in the case of Mudan & Anor v HMRC has confirmed that housing (“dwellings”) in need of repair are chargeable at the residential rates of SDLT, and that repayment claims based solely on a property’s condition are not valid.

This decision confirms HMRC’s long-standing view that if a property requires repairs but retains the fundamental characteristics of a dwelling, it is still suitable for use as a dwelling and attracts residential rates of SDLT. A key factor in determining suitability is whether a property had been previously used as a dwelling.

Anthony Burke, HMRC’s deputy director of compliance assets, said: “The Court of Appeal’s decision is a major win, protecting public funds. Homebuyers should be cautious of allowing someone to make a stamp duty land tax repayment claim on their behalf.

“If the claim is inaccurate, you could end up paying more than the amount you were trying to recover.”

Over the last couple of weeks, there have been some faint signs that the initial public offering (IPO) market in London is finally coming back to life. The digital bank Shawbrook said on Monday it would list its shares in the UK at a value of around £2 billion. Last week, the food and drinks company Princess Group, which makes Branston’s pickle as well as tinned tuna, said it was considering a listing in London, with a valuation of around £1.5 billion. The Beauty Tech Group made its debut on the market last Friday. And yet, as welcome as that flurry of activity is, it should not distract anyone from the wider picture.

The London market remains in a dire state. A report last week found that it has slipped to 22nd place globally for new equity issues, behind even Mexico and Qatar. The amount of capital raised through IPOs has fallen to its lowest level in 35 years, while the total number of companies listed on the exchange has fallen from close to 2,500 a decade ago to only a little over 1,500 now. Plenty of companies have shifted their listing to the US, others have decided to accept a takeover, and many entrepreneurs building new companies have decided a quote in London is no longer worth either the expense or the hassle. It could get a lot worse. There are already ominous signs that drugs giant AstraZeneca may shift its listing to the US, and BP could easily be taken over by one of its rivals.

Chancellor Rachel Reeves may have realised that something needs to be done. According to leaks, in her Budget next month, alongside the blizzard of tax rises, we may get one modest tax cut. Stamp duty could be scrapped for newly listed firms, or they could be exempted from the levy for two or three years. Investors would be allowed to buy shares without giving 0.5% of their value to the Treasury. It would be great if Reeves had finally recognised that cutting taxes can boost growth and raising them often crushes it. Perhaps she might start applying the same logic elsewhere.

But Reeves needs to be a lot bolder. Stamp duty should be scrapped completely. A levy every time a share is bought or sold is a huge competitive disadvantage compared with other markets where people can trade equities freely without being forced to pay anything to the government. Sure, it raises slightly over £3 billion, and the Treasury is strapped for cash. But in the medium term, far more tax revenue will be lost if the City turns into an irrelevance on the global equity markets. The levy is a relic of the days when the London market was so important that it could afford to be taxed when others were not. Those days are long gone.

Rachel Reeves must slash the red tape

The mess of governance codes that have built up over the last 20 years need to be scrapped, too. Quoted companies have to comply with a whole list of regulation – from diversity on the board, to controls on executive pay, to environmental and social targets – that simply don’t exist for private companies, or which are far more lightly imposed on rival markets. These rules might be well intentioned, but they impose big costs. They also take up a huge amount of managements’ time for no discernible benefit. London could lead the world in switching back to a simpler system.

Finally, why not offer entrepreneurs a tax break for listing in London?

There could be an exemption from capital gains tax for any founder who decides to float their business in the City. That would be a huge incentive over selling it to a foreign buyer or private equity firm. Who knows, it might even persuade a few of them to stay in Britain instead of moving to Dubai or the US.

The London stock market is facing extinction. The City has plenty of other businesses, from insurance to fund management to issuing debt. But the blunt truth is that there is not a major financial centre anywhere in the world that does not also have a thriving equity market at the centre of its operations. In London, that is disappearing. The LSE needs radical help – a tiny tweak to stamp duty won’t be nearly enough to save it.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

What are wealth taxes?

Taxes that make you pay a levy based on your assets – typically your net wealth – rather than your income from work. Such taxes used to be far more common globally than they are now. Sweden charged an annual levy on net assets for the best part of a century, with a top marginal rate that peaked at 4% in 1984; it was abolished in 2007. France had a wealth tax (riddled with loopholes) that was scrapped in 2017. As late as 1990, 12 OECD nations (advanced economies) still had wealth taxes, though they raised a paltry 1.5% of all tax revenues, on average. Today, only three countries still levy a tax on net wealth, namely Switzerland, Norway and Spain. Several European countries – France, Italy, Belgium and the Netherlands – do still levy wealth taxes on selected assets, but not on an individual’s overall wealth.

What are typical rates?

In Switzerland, which first introduced a net wealth tax in 1840, the level varies by canton between about 0.3% and 1% of a taxpayer’s net worth above a threshold typically in the low six figures. In Norway, where the tax dates back to 1892, the government currently charges 1% on individuals’ wealth exceeding a threshold of NKr1.76 million (£130,500). So if you lived in Norway and you had £250,000 in investments and £500,000 equity in your house, you’d pay an extra £6,190 a year in taxes. Above NKr20.7 million, the rate ticks up fractionally to 1.1%.

Why did wealth taxes fall out of favour?

In part, because wealth taxes are hard to introduce and administer, and are inevitably accompanied by a thriving cottage industry to help the truly wealthy avoid them. The only time a UK government was elected promising to introduce one was Labour in 1974. But over the course of his five years as chancellor, wrote a rueful Denis Healey in his memoirs: “I found it impossible to draft one which would yield enough revenue to be worth the administrative cost and political hassle.” The value of some assets is fairly easy to record, but for others – property equity, say – valuations are expensive, subjective and wide open to legal challenges. HMRC does not currently have an overview of the wealth of every citizen, and no way of doing so without a big investment of time and resources, and political will. All that makes wealth taxes a giant headache.

Why else are wealth taxes unpopular?

Bluntly, because wealth taxes don’t work. Calls for wealth taxes are readily understandable: governments everywhere – not least in the UK – are facing vast fiscal challenges in an era of low-growth and ageing populations. Meanwhile, in recent decades, the very wealthy have got much wealthier. In 2010, the combined wealth of the top 100 people on The Sunday Times Rich List was £172 billion. Last year, it was £594 billion. At the same time, the rich have remained as canny as ever about mitigating their tax liabilities (ie, paying as little as possible). The problem, though – even for fans of big government who think it’s fine for the state to tuck into individuals’ private assets – is that wealth taxes end up raising less than hoped and do so much collateral damage to the economy that they are self-defeating in fiscal terms. If that was true in Healey’s day, it’s even more so now.

Why’s that?

Because wealth, and the wealthy, are far more mobile. Dan Neidle, the Labour-supporting tax lawyer turned campaigner, recently published a 16,000-word essay “explaining why a wealth tax is a really stupid idea”, says Robert Colville in The Times. Executive summary: if you tax something, you get less of it, and wealth is no different. Neidle examines a model backed by campaigners and some Labour backbenchers, which posits that a 2% wealth tax on those with assets of more than £10 million would raise at least £24 billion a year. But he calculates that, under this system, 80% of the revenue would come from just 5,000 people and 15% from just 10. “So the entire thing could be scuppered if a dozen people got on a private jet.” Neidle favours, instead, a wholesale reform that scraps several existing taxes – including stamp duty, council tax and business rates – with a land value tax.

What are other arguments against wealth taxes?

Not only do wealth taxes not work, but they also distort the economy. Since debt is tax-deductible, wealth taxes tend to encourage the rich to avoid the tax by borrowing to invest in exempted asset classes (farmland or woodland, say), thus shrinking the tax base and distorting incentives. Alternatively, they might simply leave the country for a lower-tax jurisdiction, as did thousands of wealthy French citizens who set up in Belgium, or the thousands of the richest Norwegians who live abroad. Opponents argue that a wealth tax would only work if it were adopted globally – in practice, that means never. Another argument against wealth taxes is that rather than diminish billionaires’ political power, they would increase it by encouraging them to spend their money on nefarious political causes.

But we will get them anyway?

It’s unlikely, given that Rachel Reeves has ruled it out. But she may well be looking at more stealthy ways of taxing assets. Indeed, this summer has seen almost constant Treasury kite-flying in the press, with tales of various different property and inheritance taxes the government is said to be mulling over. There’s certainly significant wealth there, and it would be possible to tax it, says Neil Unmack on Breakingviews. Some £7 trillion of value is stored in British housing, making the full capital gains tax exemption for primary residences look tempting to target. Inheritance tax exemptions mean the average taxed estate pays 13%, not the 40% headline figure. The risk is that any such raids would add “affluent middle-class voters to the ranks of Reeves-haters". "Yet targeting them would make it politically easier for her to cut welfare spending. Especially if she does so with a degree of stealth.”

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

When Angela Rayner, the now-former deputy prime minister and housing secretary, was caught underpaying stamp duty on her £800,000 seaside flat, it was widely expected that she would step down.

The government’s ethics adviser found Rayner had breached the ministerial code when it came to tax affairs.

Rayner had referred herself to the Independent Adviser of Ministerial Standards, Laurie Magnus, after an article in The Telegraph exposed the tax scandal.

Rayner has been replaced by David Lammy, who previously held the foreign secretary role.

In her letter of resignation, Rayner said: “I deeply regret my decision to not seek additional specialist tax advice given both my position as housing secretary and my complex family arrangements. I take full responsibility for this error.”

Rayner, who was Keir Starmer’s right-hand woman, has put Labour in a deeply embarrassing position. A strong working class woman with the ability to help Labour connect with parts of the electorate, Rayner has been a role model in her now former role of deputy prime minister.

This is a blow Labour can not afford ahead of the Autumn Budget – a Budget that will be watched closely for potential tax hikes as chancellor Rachel Reeves continues to face mounting pressure to strengthen the economy.

Stamp duty problems

If there is one thing Rayner’s career-damaging mistake may have exposed, it is that stamp duty is unfair and unclear, and easy to avoid (clearly).

Yes, most taxes are deemed unfair – but the fact is stamp duty simply makes housing unaffordable as house prices remain high, it makes the market illiquid and makes it harder for people to buy a house or move.

It restricts labour mobility and is a barrier to economic growth. Economic growth that Reeves really wants.

The housing market is broken and stamp duty should be scrapped – the system does not lend itself to growth, but one that instead stifles it.

Stamp duty was introduced in 1694 - well over 300 years ago – as a way of putting a stamp on official documents to allow tax collection.

While Labour is not considering any such abolition of this hated tax, there have been rumours for it to be replaced by a new levy on properties priced over £500,000.

It could benefit some buyers, but we do not yet know the finer details of the real impact it could have, should such a property tax come into play.

People selling in London could be hardest hit, with the average property price now £566,000, according to the latest data from HM Land Registry.

Chancellor Rachel Reeves is rumoured to be set to hit homeowners with a property worth £2 million or more with a mansion tax in the Autumn Budget.

Reeves has reportedly been considering an overhaul of property taxes to balance the books in her much-anticipated Budget and one of the main policy changes could be a mansion tax.

Reports in the Daily Telegraph have suggested the chancellor could introduce a regular 1% charge on homes worth above £2 million, which would be collected through council tax.

There are suggestions that the mansion tax could be capped at £5,000 per year.

That is not the only rumoured change though.

Reeves is also reported to be considering replacing stamp duty with a new national property tax on the sale of homes worth more than £500,000 and introducing a capital gains tax charge on properties that sell for more than £1.5 million.

Nothing has been confirmed and the Treasury hasn’t commented but there are already signs that the rumours are hitting the property market.

Data from property website Rightmove shows sales agreed for £2 million-plus homes, which are the subject of a potential mansion tax, are already down 13% year-on-year.

Homes priced between £500,000 and £2 million, which would be impacted by stamp duty changes in England or the rumoured capital gains tax, have seen sales agreed drop by 8% year-on-year

Estate agents say they have also seen a change in activity.

Dominic Agace, chief executive of estate agency brand Winkworth, said this mooted move will create more uncertainty at the highest end of the property market, due to its predicted escalatory nature, at a time when the market is already under pressure as a result of Budget speculation since the summer.

He said: "Guidance will need to be provided swiftly on the highest potential tax charge, so everyone can adjust accordingly.

“With non-dom tax changes, VAT on school fees and mortgage rate increases, this will just add to more pressure on those living in these homes worth £2 million upwards, particularly in London where owners may have leveraged up to buy them."

The threat of a mansion tax could be good for those looking to move up the ladder if it causes prices to drop below wherever the threshold is set.

But there are warnings that shifting stamp duty to sellers and introducing a mansion tax would reduce the incentive for people to downsize and further restrict supply.

This could push up house prices further.

There will also be a big regional divide as the changes would have more of an impact in the south of England and London where property prices tend to be higher.

Which regions could be worst-hit by a national property tax?

Rightmove data suggests that just under a third of homes for sale in England are priced at above £500,000, and would be subject to the proposed new annual property tax, which would replace stamp duty if the policy came into force.

Homeowners in London would be the worst hit, with 59% of homes in the capital currently listed with an asking price of more than £500,000.

In contrast, just 8% of listings in the North East of England are above the £500,000 threshold.

The tax may not even attract as much as the Treasury hopes for.

A fifth of agreed property sales so far this year in England have been for homes over £500,000, Rightmove said, with 52% in London and just 4% in the North East.

How a mansion tax would hit homeowners

Currently, homeowners don’t pay any capital gains tax when selling their main property.

But one policy rumour is that the Treasury is considering applying capital gains tax when home sales reach above £1.5 million.

This would mean these sellers are treated the same as those selling an investment property.

The policy may be a winner with left-wing voters but Rightmove data shows just over 1% of all home sales agreed this year have been for properties worth above £1.5 million.

In London, one in ten (11%) of homes for sale are in this price bracket, with 5% of agreed sales so far this year being for homes above £1.5 million.

In the South West, 0.7% of agreed sales are in the £1.5 million price band, with 2% of available homes for sale in this price bracket.

In the North East, just 0.1% of agreed sales are in this upper-end bracket, with only 0.5% of all properties available for sale priced at over £1.5 million.

There are also reports that there could be an annual charge on high value homes, which may incentivise older homeowners to sell-up and downsize.

Laith Khalaf, head of investment analysis at AJ Bell, said the wealthiest would be hardest hit by charging CGT on high-value properties but there would likely be a knock-on effect for middle income families because anyone with a big tax liability may opt to sit tight in their property, causing a log jam in the housing ladder below them.

He said: “It’s far from certain that such tax changes will take place, but if they do, much will depend on the precise threshold at which CGT becomes payable in terms of the number of people affected.

“Even if such a ‘mansion tax’ is set at a high level, it would naturally cause people on middle incomes to worry it was just the thin end of the wedge, and the next time the government needs a bit of money they could just lower the threshold.

“Homeowners would also need to keep records of the costs of improvements they made to properties in order to offset them against any capital gains tax. That would be the case even for those with properties under the threshold, in case one day those houses grow in value enough to be drawn into taxation.”

How should homeowners react to proposed property tax changes?

For now, claims of property tax changes are just speculation.

Experts are warning against rushing into decisions based on rumours.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said it’s vital not to be driven into doing anything you wouldn’t otherwise consider.

She said: “If you’re worried about tax on downsizing, the key again is not to rush into anything. Downsizing is a major life change, involving all sorts of compromises and changes, and shouldn’t be rushed before you’re ready for it.

"This is your home, and you need to be happy in it. Ask yourself if you would be considering the move if it wasn’t for the rumours, and how you would feel if nothing ended up changing. That should help you decide if it’s right for you.”

But Johan Svanstrom, chief executive of Rightmove, has urged the Treasury to consider if these changes would be worth it financially and socially.

He said: “There is no real incentive for someone in a large home to downsize to a smaller one unless they truly need to and can still afford the stamp duty bill. The current rumours to stamp duty changes would only seem to exacerbate this, as it may deter some at the top of the market from moving if they would then face a new annual tax.”

Svanstrom highlighted that Rightmove’s data shows a proposed mansion tax would only affect a small proportion of the market.

He added: “The government needs to be cautious over the cumulative effect of taxation on higher priced areas of the country as it simply risks stalling this part of the market, since the importance of mobility for people and the overall economy is strong in those areas too.

“A slower market can affect all types of movers, from first-time buyers to key workers and families, even if a tax is aimed at higher value properties.”

The property website has made other suggestions of ways to boost the property market including letting home buyers stagger stamp duty payments rather than shifting the tax to the seller, as the government is rumoured to be considering.

No home movers buying the average home in England are safe from paying stamp duty as average house prices in every region now lie above the tax threshold.

Furthermore, average homebuyers in England now pay £2,500 more in stamp duty as average tax bills soared from £2,047 to £4,547 after April’s threshold changes were implemented.

Since the start of the 2025/26 tax year, homebuyers have to pay stamp duty on property purchases as low as £125,000, down from the temporarily higher threshold of £250,000.

This has been a boon for the Treasury, which has raked in £8 billion in stamp duty revenue from January to July this year.

Brits who want to buy an average-priced home of £298,237 now face increased costs, with more of their cash being taken by the taxman.

Though the average UK property will have been liable to pay, albeit less, stamp duty before the changes, the lowered thresholds now mean that home movers in even the cheapest regions of the country have to pay the tax for the first time.

We look at how much stamp duty you can expect to pay for an average home in each region of England.

How much stamp duty will I have to pay?

While buyers in London, where house prices are far higher than anywhere else in the country, will have expected to pay stamp duty before the April hike, the tax could come as a surprise to buyers in regions where houses are cheaper.

The English region with the lowest average house prices is the North East, where the typical home costs £163,679.

Before April’s changes, the average-priced property would have been well within the stamp duty threshold, so no tax would have been due. But today, buyers in the North East will have to fork out £773 in stamp duty as the minimum threshold is now £125,000.

Similarly, buyers in Yorkshire and the Humber, where the average house costs £204,410, now incur a stamp duty bill of £1,588. They could have avoided the tax altogether before the start of the current tax year.

Threshold changes have forced home movers in every region of the North and Midlands into paying stamp duty on an average-priced home.

Jonathan Stinton, head of mortgage relations at Coventry Building Society, said: “The fact that there’s now nowhere to hide from stamp duty shows just how out of step this tax has become.

“From London to the North East, those buying a typical home in any region are now being hit with a tax that can add thousands to the cost of moving.”

A table showing how much stamp duty has to be paid for the average home in each English region can be found below.

Source: HMRC, Coventry Building Society (21 August). Calculations assume buyers are not first-time-buyers.

How does stamp duty work?

Stamp duty is a tax paid by property buyers if the house they purchase is over £125,000.

As the price of the property increases, the percentage of it that you have to pay in stamp duty also increases. The rates of stamp duty for the 2025/26 tax year are as follows.

If you are a first-time-buyer then the amount of stamp duty you pay is slightly different.

In the current tax year, first-time buyers are exempt from paying stamp duty on the first £300,000 of a property purchase up to a maximum price of £500,000.

No stamp duty is paid up to £300,000, then a rate of 5% applies on any portion between £300,001 and £500,000. If your property costs more than £500,000, stamp duty is applied as normal.

It is worth noting that stamp duty works differently in Scotland, Wales, and Northern Ireland.

Property taxes seem to be the latest area being considered for reform as the Treasury looks at ways to balance the books in the lead up to this year’s Autumn Budget.

Chancellor Rachel Reeves is considering replacing stamp duty with a new levy on the sale of homes worth more than £500,000, according to a report in The Guardian.

The rumoured reforms could benefit some buyers as under current rules, home movers begin paying stamp duty when they purchase a property worth £125,000. First-time buyers have a larger tax-free allowance worth £300,000.

While stamp duty is currently payable on around 60% of transactions, the new levy would only affect around 22% of property sales, according to Onward, the think tank that has reportedly inspired the Treasury’s thinking.

However, the rumoured reforms are likely to be an effort to boost tax revenues – and the exact impact for those selling homes worth £500,000 or more will depend on the rate that is charged and how it is levied.

While the exact details of what the government is considering are unclear, a report from Onward proposes an annual rate of 0.54% for properties worth between £500,000 and £1 million, and 0.81% on values above that.

While the rate proposed by the think tank is annual, the amount would only be payable after a sale. MoneyWeek has contacted Onward for details of how this would be calculated in practice.

When asked to comment, the Treasury did not confirm or deny the rumours but said: “As set out in the Plan for Change, the best way to strengthen public finances is by growing the economy – which is our focus.

“Changes to tax and spending policies are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8 billion and cut borrowing by £3.4 billion.

“We are committed to keeping taxes for working people as low as possible, which is why at the last Autumn Budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of income tax, employee National Insurance, or VAT.”

Despite this, it looks increasingly likely that Reeves will need to find ways to boost tax revenues in the 2025 Autumn Budget, as high borrowing costs, weak economic growth and failed spending cuts put pressure on the public purse.

The National Institute of Economic and Social Research (NIESR), an independent think tank, recently said the government is on track to miss its fiscal rules by £41 billion and called for a “moderate but sustained increase in taxes”.

Rumoured stamp duty reforms could be divisive

One of the big criticisms of stamp duty relates to issues of regional unfairness. The latest rumoured reforms could run into the same problem, with those in London likely to be disproportionately impacted by the tax.

The average house price in the capital is now £566,000, according to the latest data from HM Land Registry. This means a typical household could find itself paying the tax on a fairly normal property, having stretched itself to get on the housing ladder in the first place.

Tax reforms also risk disrupting the market. “Sellers may underprice homes to avoid the tax, or inflate asking prices to offset the cost – in turn distorting valuations and stalling transactions,” said Alice Haine, personal finance analyst at investment platform Bestinvest.

Furthermore, current stamp duty rules already act as a deterrent to downsizing. A tax on sales is unlikely to help when it comes to these bottlenecks. Haine thinks exemptions for downsizers and greater support for first-time buyers would be more effective.

“A tax break for those moving to smaller properties could unlock housing stock, encouraging older homeowners living in under-occupied family homes… to sell up, freeing up more large homes for families,” she said. “Similarly, more support for first-timers at the start of the housing chain would help to keep the market moving.”

Experts advise against acting on speculation

While rumoured policies can create anxiety for taxpayers in the lead up to a fiscal event, it is important to remember that they may not actually come into effect.

Sarah Coles, head of personal finance at investment platform Hargreaves Lansdown, called the changes “pure speculation”, adding that it is “essential not to be tempted into knee-jerk reactions that could leave you worse off”.

Explaining the potential effects of panicked decisions, she added: “Anyone planning to sell a valuable property might be worried that their tax bill could rise if they sell after the Budget, so it could persuade them to rush to the market. Meanwhile, anyone planning to buy might be worried about the rumours of an annual tax, so might hold back.

“The imbalance of supply and demand could mean the market dries up and property values fall. Those who plough on with a sale at a lower price could end up taking a significant price cut to escape a tax that never happens.”

Council tax could be replaced with a local property tax

As well as looking at stamp duty, sources told The Guardian that the Treasury is considering replacing council tax with a new local property tax in an attempt to boost struggling local authorities.

Bills could be based on the value of the property, amid concerns existing council tax bands are out of date. Bands have not changed since 1991, despite the fact that house prices have risen considerably since then, with values rising more rapidly in some areas than others.

The think tank Onward recommends a minimum annual bill of £800, with those with more valuable properties paying a higher rate. It also recommends charging owners rather than residents.

Any council tax reforms could be slow to take effect. While reports suggest stamp duty reforms could be implemented this parliament, council tax changes could require Labour to win a second term in office, according to The Guardian.

City bosses are calling for stamp duty on shares to be axed to revitalise the ailing UK stock market.

Ahead of the chancellor’s Mansion House speech next week, five of the biggest investment platforms – Hargreaves Lansdown, IG, AJ Bell, Bestinvest and Interactive Investor – have told MoneyWeek that the 0.5% tax penalises investors for backing British businesses and it should be scrapped.

If the government removed the duty, it could boost the London Stock Exchange by encouraging savers to invest, and help Rachel Reeves achieve her aims of growing the UK economy.

The CBI, a business lobby group, along with chairmen and leaders from more than 30 listed companies, including Anglo American, Shell, HSBC and AstraZeneca, have also called for “bold action” to bolster the London Stock Exchange as a global capital markets hub, which includes abolishing stamp duty on shares.

Richard Wilson, chief executive of Interactive Investor, comments: “If DIY investors are to be the boost to the UK stock market that the chancellor thinks they can be, she also needs to make UK stocks and shares more investable.

“Stamp duty on UK shares and investment trusts is an outdated and damaging tax from a bygone era that serves only to undermine the competitiveness of our stock market.

“Removing stamp duty on UK shares will help encourage retail investors to back the best of British businesses.”

Gina Miller, political activist and founding partner of SCM Direct and MoneyShe, also thinks stamp duty on shares should be abolished. She tells MoneyWeek: “Removing this tax would be a straightforward, pro-growth reform that would help level the playing field for UK equities and encourage both domestic and international investors to allocate more capital to British companies.”

The chancellor is expected to announce plans to cut the cash ISA limit in her Mansion House speech on 15 July, in an effort to shift cash savings into UK shares.

According to the Financial Times, Reeves is set to introduce an annual tax-free allowance for cash ISAs at a lower level than the current £20,000-a-year overall ISA limit. It is understood the final figure is still being discussed by Treasury officials.

However, investment experts argue that axing the 0.5% tax would be a more effective tool to get people investing.

Almost three quarters (72%) of investors believe removing stamp duty on UK shares and trusts would incentivise them to invest more in UK assets, a poll by Interactive Investor of about 1,000 retail investors found.

That compares to only 7% who said they would invest more in the stock market if the government lowered the cash ISA allowance, which is currently £20,000.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, says scrapping stamp duty should make the City more attractive. “It is unreasonable that investors buying UK shares have to pay stamp duty when most overseas share trades are stamp duty free.”

According to Michael Healy, UK managing director at IG, the London stock market, “once the envy of the world, is in a downward spiral”.

As well as abolishing stamp duty, IG thinks the government should go further and scrap the cash ISA too.

Why does the UK stock market need saving?

Concern has been mounting about companies leaving the London Stock Exchange (LSE), or being reluctant to list.

The LSE has seen a wave of companies departing in recent years. The exodus means that last year, 88 companies left the London market or moved their primary listing elsewhere, and only 18 joined. More than 70 have left so far in 2025.

Money transfer company Wise announced plans to move its primary listing from London to the US in June. Flutter Entertainment and Ashtead Group have also chosen to switch their listings to the US.

A lack of IPOs means the UK stock market is shrinking. The LSE saw just 18 IPOs last year according to EY, the lowest number since the accountancy firm started recording the data in 2010.

Streeter says “the bright lights of New York, with its hefty valuations and super-star tech giants, are a big draw” for companies choosing where to list.

According to Healy, the UK stock market is in crisis, and “we need bold action”. He adds: “At the same time, the UK is stuck in a damaging savings-first mindset, with far too few people investing to build wealth for the long term.”

“Remove this outdated tax that unfairly penalises UK investors”

The 0.5% stamp duty tax is paid when investors buy UK shares, investment trusts, and even when buying UK shares in their ISAs and pensions, but the industry argues it is outdated and unfair.

Healy calls stamp duty a “self-inflicted wound”. He adds: “No other major economy taxes equity investment like this”, and says Reeves must “remove this outdated tax that unfairly penalises UK investors”.

Jason Hollands, managing director of Bestinvest by Evelyn Partners, tells MoneyWeek he’s been arguing for the scrapping of stamp duty on UK share trades for some time.

He explains: “It has a much more material impact on the UK equity market than people might assume, because it discourages active share trading, a vital ingredient to improving market liquidity.

“Another pernicious impact is on the visibility of liquidity because stamp duty drives institutional investors to use derivatives like CFDs instead that do not incur stamp duty, so has the effect of reducing transparency and compounding an impression of poor liquidity.”

AJ Bell also supports the removal of stamp duty from UK shares. Tom Selby, the platform’s director of public policy, comments: “Reeves should review the impact of stamp duty on UK shares – a tax which explicitly disincentivises investment in British companies at a time when government policy is aimed at doing precisely the opposite.”

Gina Miller points out that the UK has the lowest domestic equity allocation among major economies – 4% versus Australia’s 37.7% – and says radical action is needed to address this problem.

“We strongly support the growing calls to abolish stamp duty on shares. It is a significant and unnecessary barrier to investment, reducing liquidity and widening share dealing costs, harming both investors and the wider UK economy,” she comments.

According to Streeter, it’s time the UK was “brought more in line with most other G7 countries and see the playing field levelled” by axing the 0.5% tax on shares.

She says the Office for Budget Responsibility is forecasting that the tax take from stamp duty on shares will rise by 2030 to hit £5.1 billion annually, from £4.2 billion currently.

“However, this is still a tiny proportion of the pie compared to income taxes, which account for £310 billion of the Treasury’s revenues.

“If stamp duty on shares is cut, there may be an initial hit to the coffers, but if it encourages more people to dip their toe into the London market, it could help revitalise the UK economy and create an investment culture in the UK and help the economy grow,” notes Streeter.

Removing stamp duty from shares in ISAs and pensions

AJ Bell says that if Reeves did not want to remove stamp duty from all UK shares, a good starting point is to abolish it on shares in ISAs.

“While the multi-billion-pound annual cost of scrapping stamp duty across the board might make the chancellor wince, creating a specific carve-out for ISAs to support her retail investing drive could be achieved at a fraction of this cost – we estimate somewhere in the region of £120 million,” says Selby.

“In government spending terms, that is pretty much a rounding error and would remove a nonsensical barrier to ISA investors buying shares in UK businesses.”

Hollands at Bestinvest recommends that the chancellor start by “exempting stamp duty from trades within ISAs and pensions, as it undermines the ‘tax-free’ promise”.

He notes: “Reeves should also exempt investment trusts, as it puts them at a disadvantage to OEICs in this respect and stamp duty will already have been incurred on share purchases in their portfolios. If the government isn’t prepared to go the whole hog, then she might also consider exempting small and mid-cap stocks, which are typically more domestically focused businesses.”

Other ways to encourage people to invest in UK shares

There are other things the government could do to encourage people to invest in the UK stock market.

One is to give more investors the opportunity to take part in IPOs.

Streeter comments: “Historically, retail investors have been locked out of the bulk of brand-new listings, with the privilege reserved for institutional investors.

“When there is retail participation there is often huge interest. At the Raspberry Pi IPO, HL was significantly over-subscribed. The demand from retail investors to buy into the equities market is there, and regulatory change should support this demand.”

The government seems to be more focused on working out how to shake up the ISA regime to turn savers into investors, and hopefully boost the UK economy.

Interactive Investor boss Wilson cautions that any changes to the cash ISA “will not be effective unless they are combined with other measures that incentivise people to put their money in the markets” - namely, scrapping stamp duty on shares.

IG has launched a Save our Stock Market campaign, which as well as calling for stamp duty to be removed, also wants to see cash ISAs scrapped.

Specifically, it says people should not be able to open new cash ISAs anymore, and that the cash ISA allowance should be brought down to zero from April.

The platform says its analysis shows that UK cash savers have seen around one-seventh of the real returns (after accounting for inflation) of UK investors since cash ISAs were first established by the government in 1999. Despite this, cash ISA subscriptions are rising while stocks and shares ISAs are falling.

According to IG, “cash ISAs are hindering rather than helping them to build wealth”.

Its campaign is also calling for 20% income tax relief on UK shares held in ISAs for at least three years, similar to the Enterprise Investment Scheme, which “should encourage retail investment in UK companies”.

The housing market has had a strong start to 2025, with new sales agreed running at 10% higher compared to a year ago, according to Zoopla.

Annual house price growth has dropped slightly from 2% to 1.9% though, with higher mortgage rates and upcoming stamp duty increases to blame.

The property portal reports there are 11% more homes for sale than a year ago, with flats leading the charge. The number of flats for sale surged 14% in the early weeks of this year, versus a more modest increase of 5% in the number of houses for sale.

Zoopla also says the gap between the value of a house and a flat has reached a 30-year high, with the average house value (£319,500) 1.7x or 67% higher than the average value of a flat (£191,300).

Richard Donnell, executive director at Zoopla comments: “The housing market remains resilient with more people looking to move home in 2025 than this time last year. Average earnings rising by 6% over the last year, well ahead of inflation, is boosting buyer confidence and helping to reset housing affordability.

“Flats have become even cheaper compared to houses. Buyers are still prioritising houses over flats but there are opportunities for canny buyers prepared to do their homework and weigh up the purchase of a flat rather than potentially waiting longer to buy a house.”

Why has the price gap between houses and flats grown so much?

According to Zoopla, while flats offer value for money, buyers have continued to prioritise houses over buying flats, with 52% of first-time buyers outside of London looking for a three-bed house (up from 44% in 2017). Demand for one and two-bed flats has declined from 25% to 17% over the same period.

The “race for space” during the pandemic turbocharged the demand for houses, while concerns over running costs for flats, such as leasehold charges, as well as fire safety concerns for some newer flats, have impacted demand, acting as a drag on flat prices.

The average value of a flat has increased by just 7% over the past five years compared to house values increasing by 24%.

It’s this mismatch in supply and demand – lots of flats for sale, but not many buyers – that explains why the price gap between flats and houses has hit a 30-year high. Over the past year, flat values have risen by just 0.5%, with house values up 2.2%.

Tom Bill, head of UK residential research at the estate agency Knight Frank, comments: “The higher proportion of flats coming to the market in part reflects the fact the stamp duty hike from April will have a greater impact on lower-value markets.”

Where are house prices rising the most?

House price growth stalled or slowed across most regions of the UK in January. This reflected the sharp dip in consumer confidence in the wake of last year's Autumn Budget, with mortgage rates increasing 0.5% since September 2024, squeezing buyer power, said Zoopla.

Looking across the past 12 months, house price growth continues to follow a north-south divide. Average prices are 7.2% higher in Northern Ireland and 3% higher in the North-West.

House prices across London and southern England edged up only 1% to 1.2%.

What’s the outlook for house prices this year?

The supply and demand imbalance, and the upcoming stamp duty changes, will likely keep house prices in check this year.

On 1 April, the tax-free stamp duty thresholds will drop back to their original levels of £125,000 for regular buyers (it’s currently £250,000) and £300,000 for first-time buyers (from £425,000).

According to Zoopla, half of homeowners will have to pay an extra £2,500 per purchase in stamp duty when the thresholds fall. Two-fifths of first-time buyers will pay higher stamp duty from April but 60% will still pay no stamp duty.

“Home buyers will expect to reflect this extra cost in their offers, typically looking to split the cost with the seller. The amounts are not large, but the overall impact will keep house price growth in check over 2025,” says Zoopla.

Bill at Knight Frank adds that “demand is playing catch-up with supply in the UK housing market, which is keeping downwards pressure on prices”.

Stamp duty land tax (SDLT) is a tax you have to pay when buying property or land over a certain price in England and Northern Ireland.

The rates you pay differ depending on the value of the property, as well as what it is going to be used for.

But the rules are slightly different for additional homeowners, meaning landlords can face an extra tax burden on their buy-to-let properties.

Here’s everything you need to know, and how land tax is applied on BTL in Wales and Scotland.

How much is stamp duty on a buy-to-let property?

There are different property tax rules and rates in different parts of the UK.

How much stamp duty do you pay on a buy-to-let in England and Northern Ireland?

Stamp duty on a BTL property is higher if you already own a home as you need to pay a surcharge known as the 'Higher Rates on Additional Dwellings'.

This means you pay 5% above the standard stamp duty rate, though you won't pay the extra 5% if you only own one property. The surcharge was first introduced in 2016 at the level of 3% and was increased to 5% in October 2024 by chancellor Rachel Reeves.

Below are the current rates of stamp duty:

Credit: Gov.uk

While standard stamp duty rates are tiered, the 5% surcharge on buy-to-lets is applied to the whole purchase price of the property.

As an example, if you are buying a second home with a purchase price of £300,000, you would pay £20,000 in stamp duty.

You would pay 5% on the first £125,000 (£6,250), 7% above £125,000 and up to £250,000 (£8,750) and 10% on the final £50,000 (£5,000).

Below are the current stamp duty rates for second homes:

Credit: Gov.uk

How much stamp duty do you pay on a buy-to-let in Wales?

In Wales, stamp duty was replaced by land transaction tax (LTT) in 2018. If you are buying a property and you already own one or more residential properties, then you must pay the higher rate of LTT.

You pay the lower rate of LLT if you are buying a home and it is your main residence. These rates are:

Credit: Gov.wales

These are the higher LTT rates you’ll pay if you’re buying a second home:

Credit: Gov.wales

As an example, on a second home bought in Wales for £350,000, you would pay £24,950 in LTT. This is because the first portion, up to £180,000, incurs a £9,000 tax bill. £5,950 applies to the portion between £180,000 and £250,000, and £10,000 is incurred on the portion from £250,000 to £350,000.

How much is stamp duty on a buy-to-let in Scotland?

Land and buildings transaction tax (LBTT) replaced UK stamp duty in Scotland from April 2015 and is charged on properties worth more than £145,000.

The portion between £145,001 and £250,000 is taxed at 2%, between £250,001 and £325,000 is taxed at 5%, the portion between £325,001 and £750,000 is charged at 10% and anything over that is taxed at 12%.

For landlords, Scotland has its own surcharge called an additional dwelling supplement (ADS), which is charged on top of LBTT when a buy-to-let (or second) property is purchased.

In Scotland, the ADS is charged at 8% on the whole purchase price of the property.

As an example, on a £300,000 second home, you would pay a total of £28,600 in LBTT. You’d pay £4,600 in LBTT and £24,000 on the ADS.

Can I claim back stamp duty on buy-to-let property?

If the property remains a buy-to-let then the stamp duty is due and you are not eligible for a refund.

If you sell your main residence or second home within three years of buying the buy-to-let home, and now reside in that buy-to-let property, you could be eligible for a stamp duty refund of the surcharge you paid.

You can get help on this from an accountant.

In Wales, you can claim back LTT paid at the higher rate if you sold your main residence within three years of buying the second property.

In Scotland, you can claim a refund of the ADS if you meet three criteria: you sold your previous property within 36 months of buying the second one, the property that was sold was your main residence in the 36 month period and you have lived in the property you paid ADS on as your main residence.

Are any properties exempt from buy-to-let surcharges?

In England and Wales, if you inherit or are gifted a buy-to-let property then stamp duty doesn’t apply.

Surcharges are charged on all buy-to-let property purchases, though no stamp duty is payable on caravans, houseboats or mobile homes.

In Wales, the higher rate of LTT doesn’t apply if you start using a second home as your main residence and have sold the last main home before buying the second one.

You also pay no LTT on a second property worth less than £40,000 or if it’s a caravan, houseboat or mobile home.

In Scotland, inherited or gifted second homes don’t have to pay the ADS, nor do second homes bought for less than £40,000.

Do first-time buyers have to pay additional stamp duty for a buy-to-let?

As long as you've never owned a property before and are purchasing a buy-to-let home, you won't have to pay the additional dwellings extra stamp duty rate. Instead you will pay standard home buyer rates.

However, since you’re purchasing a buy-to-let, you won't qualify for first-time buyer stamp duty relief, which only applies if you intend to live in the property. This relief means first-time buyers in England and Northern Ireland pay no stamp duty on property purchases up to £300,000.

In Scotland, first-time buyers benefit from no LBTT on properties up to £175,000, but only if you intend on living in the property. So, if you bought a home for a BTL, you wouldn’t get this relief. No ADS would be owed on the property as it only applies if you own more than one dwelling.

In Wales, a first-time buyer would not pay the higher rate of LTT on a buy-to-let as it would be their sole property.

When do you need to pay stamp duty?

HMRC rules for England and Northern Ireland state that stamp duty must be paid within 14 days of your property or land purchase to avoid any extra charges and interest.

In Wales you pay the Welsh Revenue Authority within 30 days of the completion of the purchase. And in Scotland you have 30 days after buying your property to submit a Land and Buildings Transaction Tax return and pay any tax due.

Usually buyers – in any region – will pay the money to a conveyancing solicitor in advance of the completion date who will take care of the payment to the relevant body. There will be penalties for paying late.

Do limited companies pay stamp duty on buy-to-let?

There are no stamp duty exemptions for those purchasing a buy-to-let property via a limited company. The buy-to-let surcharge still applies.

In Wales, you have to pay the higher rate of LTT if you own a limited company. In Scotland, limited companies have to pay ADS.

Can a mortgage help cover stamp duty costs?

It is possible to add stamp duty to your mortgage, though this may vary between lenders.

If you take this route, it's important to understand that this will incur interest over the duration of the mortgage term and end up costing far more than the original tax bill.

It will also affect your loan-to-value ratio (LTV) which could mean you end up paying higher interest rates for your entire mortgage as, broadly, the higher your LTV, the higher the mortgage rate you pay.

For example, if adding the stamp duty bill takes you from a 75% LTV to an 80% LTV, you could end up with a more expensive mortgage.

No tax is popular, but stamp duty is more unpopular than most. Moving house is probably the most expensive thing you will ever do – and a stamp duty bill can add thousands of pounds to the overall cost.

Over the past year, UK house prices have risen to £290,000 on average, leaving the typical buyer with a stamp duty bill in the region of £2,000 at current rates. This rises to £13,550 for buyers in London, where the average house price is £521,000.

For the past couple of years, buyers have enjoyed a temporary increase to the nil-rate thresholds, but these are set to fall back to their original levels from 1 April 2025. What’s more, it looks unlikely that Labour will extend this form of relief when chancellor Rachel Reeves delivers her first Budget on 30 October.

Under current rules, those buying a single property only start paying stamp duty once the property’s value exceeds £250,000. This rises to £425,000 for first-time buyers. However, these are temporary thresholds that were introduced in 2022. They are due to expire on 1 April 2025, at which point they will drop back down to £125,000 and £300,000 respectively.

On the campaign trail, Labour said it did not plan to extend the current level of stamp duty relief for first-time buyers, despite the Conservatives promising to make the £425,000 threshold permanent. This difference in policy was perhaps surprising given Labour’s focus on first-time buyers elsewhere in its manifesto, for example in its Freedom to Buy pledge.

“Bear in mind that Labour took this position at a time when they were stating their plans did not require tax rises. Since then, it is claimed that a ‘black hole’ has been uncovered in the nation’s finances requiring ‘painful decisions’ at [the] Budget,” says Jason Hollands, managing director at wealth management firm Evelyn Partners.

Despite this, stamp duty remains problematic, with critics arguing that it is clogging up the property market by acting as a disincentive to downsizing. Against this backdrop, we take a closer look at the tax. How much revenue does stamp duty raise for the government, what has Labour said about it, and why do critics think it should be cut or abolished?

How will stamp duty changes hit the property market?

Currently, an estimated 80% of first-time buyers pay no stamp duty on property purchases, with 14% paying partial duty.

A return to previous thresholds, as expected from April 2025, would result in an additional 20% of first-time buyers becoming liable for the controversial property tax and a further 14% would be required to pay a partial amount.

Research by Zoopla suggests the impact would be more keenly felt in southern England. The average first-time buyer in London and the South East would pay £5,600 and £1,390 respectively, compared with nothing today.

Faced with higher buying costs, first-time buyers will want to pay less for homes in these areas which will keep price rises in check, Zoopla added.

How to calculate stamp duty

You pay stamp duty land tax (SDLT) when you purchase a property over a certain value, sending the money to HMRC by completing an SDLT return. You need to do this within 14 days of completing the purchase of the property. Your solicitor or conveyancer will usually file this on your behalf and add the tax to their fees.

The amount of stamp duty owed depends on a number of factors, including the value of the property, whether you are a first-time buyer, and whether you own any other properties already.

Under current rules, you only pay stamp duty on properties worth more than £250,000 (or £425,000 if you are a first-time buyer). As introduced previously, these thresholds are temporary and are set to fall back to £125,000 and £300,000 respectively on 1 April 2025.

Our stamp duty calculator provides further information on SDLT rates and how much you are likely to pay.

How much does stamp duty raise for the government?

Stamp duty land tax raised £11.6 billion for the government in the 2023/24 tax year, according to the latest HMRC estimates.

For context, this is higher than the amount brought in by inheritance tax – another widely-hated revenue generator. IHT receipts hit £7.5 billion in the most recent tax year, a record sum. Meanwhile, capital gains tax (which some think Reeves will hike in her Budget) is estimated to have raised £14.5 billion over the same period.

Each of these pales in comparison to income tax, National Insurance contributions and VAT, though. Together, these three taxes account for almost two-thirds of total tax revenue, according to the Institute for Fiscal Studies.

Despite this, SDLT has been a decent source of income for the government in the past. In the decade between 2010 and 2020, “the tax base for property transaction taxes grew faster than GDP on an annual basis in nearly all years,” according to the Office for Budget Responsibility (OBR). “This was due to increases in both the average property price and the number of properties being bought and sold.”

SDLT receipts can be volatile, particularly in periods of financial crisis when transaction volumes fall, but the OBR expects them to raise £14 billion in 2024/25. This would amount to an estimated 1.2% of total tax receipts.

On top of this, we can expect SDLT tax receipts to rise from 1 April 2025 (when the nil-rate thresholds return to their previous levels).

According to the OBR, the temporary SDLT tax relief measures introduced in 2022 have cost the government £1 billion per year, on average.

The problem with stamp duty

While stamp duty is a decent revenue raiser for the government, critics say it causes stagnation in the property market and dampens growth, thereby counteracting its economic benefits. As recently as last month, the Organisation for Economic Co-operation and Development (OECD) suggested the government consider scrapping the tax entirely.

The main argument against stamp duty is that it discourages people from moving house – in particular those who are thinking about downsizing. Older people hang on to large family homes even once their children have moved out and, in turn, this reduces housing supply.

Of course, less supply means higher prices – bad news when the country is in the midst of a housing crisis. Stamp duty also unfairly penalises those who live in areas like London, where house prices are significantly higher than the national average.

But it’s not just buyers who suffer. IFS director Paul Johnson says stamp duty is bad news for renters too. Those who own second homes (including buy-to-let properties) pay a 3% stamp duty surcharge, first introduced in 2016. These costs are typically passed on to tenants in the form of higher rents.

Despite this, Labour’s stance on the campaign trail suggests stamp duty reliefs are off the table when it comes to Reeves’s Budget on 30 October.

“I suspect [the government] will instead message that, rather than temporary measures to help people get on the housing ladder, their plans for shaking up the planning system and building 1.5 million new homes will address the root problem facing first-time buyers, namely the undersupply of homes,” says Hollands.

One of the key figures you'll need to know before buying a house is how much stamp duty you'll pay on the purchase.

Stamp duty is a tax you pay to the government when you purchase a property worth over £125,000 in England and Northern Ireland – although there are different rules for first-time buyers. The amount you pay depends on the cost of the property.

Stamp duty is one of the UK’s most hated taxes as it increases the cost of buying a property – some even describe it as the “worst tax in Britain” as it limits activity in the housing market.

It’s not just people in wealthier areas that have to pay it either. Stamp duty is now due on the average-priced home in every English region unless you’re a first-time buyer.

We look at what stamp duty is, and explain how much you will pay.

What is stamp duty?

Stamp duty is a tax paid when you buy a property in England and Northern Ireland. It applies to home movers who are buying a property that is over £125,000, and first-time buyers purchasing a home for more than £300,000.

Assuming your purchase is subject to stamp duty, you will pay tax on increasing portions of the property price.

The only instance in which you will not need to pay stamp duty is if the property you purchase costs less than £125,000, or less than £300,000 if you are a first-time buyer.

In April 2025, the threshold at which home movers start paying stamp duty was lowered from a temporarily higher threshold of £250,000 to £125,000, meaning more buyers are now liable to pay the tax.

How much is stamp duty?

How much stamp duty you pay depends on how much the property costs. Different rates apply to different portions of the property cost in England and Northern Ireland.

First-time buyers can get a discounted rate, while buyers in Scotland and Wales face a different form of tax (more on this below). Non-residential property or land is also subject to different taxes and rates.

Here’s what you will pay in stamp duty, depending on the value of the home you’re buying in England and Northern Ireland:

How much stamp duty will I pay on an average home?

The average price of a house in the UK was £269,000 in June, according to HM Land Registry.

Using this average, we can work out the average stamp duty that you would pay if you bought a house at this price.

If someone who is not a first-time buyer were to purchase a house at this price, they would pay £3,450 in stamp duty, paying the 0%, 2%, and 5% rates on different portions of the property cost.

The price of £269,000 is split between three stamp duty brackets. The first £125,000 of the price is tax-free so this will leave £0 of stamp duty.

The next £125,000 of the home’s price is then taxed at 2%, leading to £2,500 in stamp duty.

Then, the final £19,000 left in the house price is taxed at 5%, costing £950 in stamp duty.

Adding these together (0 + 2500 + 950) means the total stamp duty would be £3,450.

You can use this method of calculation to work out how much stamp duty you will pay on any home.

How much is stamp duty for first-time buyers?

First-time buyers in England and Northern Ireland are exempt from paying stamp duty on the first £300,000 of a property purchase before a rate of 5% is applied on any portion from £300,001 to £500,000.

If the property price is more than £500,000, they will pay the normal rates of stamp duty.

Using the example of a £350,000 house, we can see that while a home mover would pay £7,500 in stamp duty, a first-time buyer would pay just £2,500.

Breaking down the calculation for a first-time buyer, we can see that they will pay 0% in stamp duty for the first £300,000 of their property price.

Then, they will be charged 5% on the remaining £50,000 of the house price, resulting in a bill of £2,500.

A table showing stamp duty rates for first-time buyers in England and Northern Ireland can be found below.

How much stamp duty do you pay on a second home?

If you are not a home mover and are instead buying a second home, you will usually have to pay 5% on top of the usual stamp duty rates.

The rates of stamp duty for a second property can be found below.

If, for example, you buy a second home for the average house price of £269,000, you will have to pay £16,900 in stamp duty.

The first £125,000 of this is taxed at 5%, giving you a liability of £6,250.

The next £125,000 is taxed at 7%, meaning you owe the taxman £8,750 on this portion.

Then, the final £19,000 is taxed at 10%, resulting in a £1,900 stamp duty liability.

Adding all of these up (6,250 + 8750 + 1900) gives you a total stamp duty bill of £16,900.

How much property tax could you pay in Scotland and Wales?

Scotland and Wales have different property tax regimes. The devolved government in Edinburgh replaced stamp duty with the Land and Buildings Transaction Tax (LBTT) in 2015, while the Welsh government replaced it with the Land Transaction Tax (LTT) in 2018.

Land and Buildings Transaction Tax in Scotland

The rates of LBTT are set by the Scottish government and are locked in until 2026. Here’s what the bands look like:

*Assuming property price of £1 million

*Assuming property price of £1m

First-time buyers are exempt from paying anything up to a value of £175,000.

The average price of a house in Scotland is £215,238, according to Halifax, which would incur a LBTT bill of £1,404 for a home mover.

The first £145,000 is taxed at 0%, so you will get an LBTT bill of £0 for this portion.

The remaining £70,238 left of the property’s price is then taxed at 2%, resulting in a total LBTT bill of £1,404 .

If you were purchasing the property as a first-time buyer, you would instead pay £804 in LBTT, benefiting from the more generous thresholds.

This is as you pay £0 in tax on the first £175,000 of your purchase as the rate is 0%.

You will then pay just 2% on the remaining £40,238 of your purchase price, incurring an LBTT bill of £804.

Land Transaction Tax in Wales

The devolved administration in Cardiff does not offer any relief or reduction in LTT for first-time buyers. Here’s what you will pay in Wales:

*Assuming property price of £2 million

The average price of a property in Wales is £227,928, according to Halifax. Buying a house at this price will incur an LTT bill of £175.68.

The first £225,000 of the property price incurs a 0% rate, meaning you pay £0 in LTT.

Then, the remaining £2,928 is taxed at 6%, resulting in a total LTT bill of £175.68.

Stamp Duty cuts promised in the September mini-Budget will come to an end on 31 March 2025, chancellor Jeremy Hunt revealed in his autumn statement today.

The cuts in stamp duty would save homebuyers up to £6,250, so anyone looking to buy a house may want to take advantage of those savings while they can.

The Stamp Duty Land Tax cut was one of Kwasi Kwarteng’s crowd-pleasing moves when he set his mini-Budget, aiming to help around 200,000 homebuyers.

“This will now be a temporary SDLT reduction. The SDLT cut will remain in place until 31 March 2025 to support the housing market and the hundreds of thousands of jobs and businesses which rely on it. The government will amend the Stamp Duty Land Tax (Reduction) Bill to implement this measure,” Hunt stated in his Autumn Statement today.

Here’s what you need to know about the current stamp duty cut, before it is reversed in 2025, and how much you can expect to pay if you are buying a house.

What are the changes in stamp duty tax?

The cut raises means the threshold at which stamp duty is payable will be £250,000 – up from £125,000.

For first time buyers, this threshold is up from £300,000 to £425,000.

The move means around 200,000 homebuyers in England and Northern Ireland will escape having to pay any stamp duty tax altogether. Stamp duty is a devolved tax, so buyers in Wales and Scotland have yet to wait and see if the cut is adopted by their governments too.

The property on which first-time buyers can claim relief also went up from £500,000 to £625,000.

Raising the threshold at which stamp duty is payable means a typical family moving into a semi-detached property will save £2,500 on stamp duty. For a house costing £500,000, you could save £6,250.

Commenting on the new stamp duty tax deadline, Richard Campo, founder of broker firm, Rose Capital Partners said: “Putting a deadline on the stamp duty changes is a really bad idea. The only good thing that came of the infamous mini budget was that the stamp duty allowance wasn’t time limited.

Will house prices come down?

The latest house price index from the ONS shows house prices are coming down, but experts fear a stamp duty tax deadline will result in prices rising again.

“What always happens when you create a deadline? It creates a rush to hit the deadline which pushes up prices artificially,” Campo added.

While stamp duty cuts could reduce the cost of moving, there are concerns it will create a ‘toxic cocktail’ pushing up house prices and help second or buy-to-let property buyers..

“Structural changes in stamp duty aren’t guaranteed to stimulate demand. When relief was introduced for first time buyers, the government assessed the impact the following year. It found that most of those who took advantage were going to buy anyway, so it only increased demand by around 1,000 transactions in the first 13 months.

“Given the costs involved, that worked out as a cost to the Treasury of around £160,000 per extra transaction. It was also calculated to have decreased the cost of buying by up to 0.5 percentage points, but increased prices by up to 0.7 percentage points – wiping out any cost saving for buyers,” Sarah Coles from investment firm Hargreaves Lansdown adds.

There are also concerns that the biggest problem facing the property market right now is a severe shortage of supply – currently, the average agent only has 36 properties on the books.

Stamp duty calculator

If you’re buying a house, depending on the transaction price, you may have to still pay some tax. You can work this out using our stamp duty calculator below.

The calculator is not suitable for first-time buyers, those buying non-residential land or property or non-UK residents.

Who will pay stamp duty and what are the rates (ending 31 March 2025)?

• up to £250,000 – you’ll pay 0% on the portion within this band
• From £250,001 to £925,000 – you’ll pay 5% on the portion within this band.
• From £925,001 to £1.5 million – you pay 10% on the portion within this band.
• £1.5m+ – you are charged 12% on the portion within this band.

An irritated tweet from a reader. He lives in Scotland, had just bought a house and, thanks to Scotland not slashing stamp duty on house purchases in the same way as England had (no tax is payable on purchases up to a price of £500,000 in England vs £250,000 in Scotland), he said, just paid tens of thousands more to get his house than he would have had he been in the UK. I can see how that would be totally maddening.

But here’s the question – had he really paid more than he would have in the rest of the UK? I suspect not. Because, in the end, houses sell for as much as buyers are able to pay – and if they aren’t paying stamp duty, they can pay more in total for the house itself.

It might be buyers that have to actually hand over the stamp duty cash to the state, but it is the seller who tends to be affected by its level. When stamp duty goes up they sell for less; when stamp duty goes down they sell for more. This is not an exact science, but it is not hard to see in the numbers either.

The stamp duty cut came into effect in July. By the second week of August, the papers were reporting exactly what you would have expected: there was, as The Times put it, a “surge in the number of homebuyers, leading to bidding wars and the number of homes being sold over the asking price reaching record levels.”

There was a 45% rise in first-time buyers, and various estate agencies reported inquiries up by 30%-40%. The number of buy to let investors looking rose by 28% and of second home buyers by 22%.

You can see this same kind of dynamic working in the Help to Buy scheme as well. State attempts to subsidise the house purchases of the young simply push up the total amount they are able to pay – and do pay. Most research suggests that Help to Buy purchasers end up paying 5% to 8% more than ordinary buyers of new-build houses, something that has long allowed builders to keep their prices up while maintaining their glorious record of delivering generally shoddy products. Nice.

I think stamp duty is an awful tax. It gums up the housing market, it penalises those without well-off parents (if you need to pay a deposit and your stamp in cash saved out of earned income, you have an awful lot of saving to do); and it should be replaced by CGT on primary homes. But that doesn’t mean removing it will always make the final price of a house cheaper than keeping it.

The higher rate of stamp duty on second properties comes with several exceptions, syas Sarah Moore. Here's what they are.

Prime ministerial hopeful Boris Johnson wants to overhaul stamp duty. He has proposed axing it on properties worth less than £500,000 and lowering the rate on properties worth more than £925,000. Whether or not he sticks to this pledge, it's worth knowing the stamp-duty exemptions that currently exist.

One aspect of stamp duty that comes with several exemptions is the higher rate due on the purchase of second homes. This applies if, at the end of the day on which the transaction takes place, you own more than one property.

Importantly, however, it doesn't apply if you own more than one property but the property you are buying is replacing your main residence, if that is being sold. Moreover, if you buy a new home, but still own your previous main residence, you can claim a refund of the higher rate if you sell it within the next three years. Just note that you need to claim your refund within 12 months of the sale of the previous residence or within 12 months of when you file your stamp-duty tax return, whichever is later.

Somewhat confusingly, there is another loophole that applies where someone is buying a new main residence, but not actually replacing a current main residence that they own. Normally in this situation, you would have to pay the higher rate if you happen to own other properties.

However, if, within the previous three years you have sold a main residence, you are also entitled to avoid the surcharge. This particular loophole could be helpful for buy-to-let landlords who are currently living in rented accommodation, for instance.

A slightly less complicated exception may be of use if you have recently inherited property. The additional stamp-duty levy will also not apply if you are buying a second home but the interest you have in another property is a less-than 50% share of a property that you inherited within the previous 36 months.

Finally, it's useful to know the types of transaction that attract commercial, rather than residential, stamp-duty rates. Commercial rates range from 0% for the value of a property between £0 and £150,000, 2% for £150,001 to £250,000 and 5% on a value above £250,000. This compares to residential rates, which can go up to 15% for value more than £1.5m. Examples of non-residential transactions include the purchase of mixed-use properties (so if you bought a building made up of a flat above a shop), and the purchase of six or more residential properties in one go.

We hate stamp duty at MoneyWeek it'sa madness of a tax. The fact that ordinary people have to come up with lumps of real cash on top of their deposits every time they move house clearly makes people want to move house less often. It is a wealth tax that explicitly discourages mobility it makes moving expensive, and in doing so, it makes people worry about taking jobs outside their area, and it stops older people downsizing. The result is a classic example of the old saying that you get more of what you don't tax and less of what you do: it is fewer housing transactions.

One solution we have suggested here before is shifting the burden of the tax from those who don't have the cash (buyers) to those who do (sellers). The Yorkshire Building Society seems to think this is a good idea too. Itplans to formally suggest it to the government as a policy to be announced in the Autumn Statement with a view to taking first-time buyers out of the tax altogether (if you are only buying, you aren't paying) and increasing the total number of transactions in the market by about 16,000 a year.

The obvious riposte to this is to say that shifting the burden will make no difference to anything: after all, house prices are about what people can afford to pay. The total sums buyers can afford to pay won't change, so sellers will simply raise their prices to reflect the tax they will have to pay.

Yes and no. Stamp duty has to be paid in actual cash. So, say you are a buyer in the current market, with cash of £60,000. You can get a 90% loan-to-value (LTV) mortgage. If stamp duty didn't exist, you could pay £600,000 for a house. But it does. And if you buy a £600,000 house, the duty will be £20,000 which you don't have. So you have to buy cheaper.

Let's say you cut your expectations to a £500,000 house. Now your deposit is £50,000 and you have £10,000 left over for stamp duty. Whoops! That's not enough either. The stamp duty on £500,000 is £15,000. Hmm, how about you cut to £480,000? Nope. £460,000? Now you're there. Your deposit is £46,000 and the stamp duty is £13,000. See the point? It is all about leverage.

For the sake of £20,000 cash upfront, the buyer has had to spend £140,000 less on a house. It is debilitating stuff. Now let's assume the sellerpays. On sale, unless they are insanely over leveraged, they will have the cash to pay up. It will cut the cash they have for a deposit going into their next house, but as they will (hopefully) have more equity, and in the main be upsizing, this will matter less.

The ones who will take the hit are, of course, the ones at the end of the value chain the downsizers. But still, if you are worried about intergenerational inequality, you won't mind that much. I'd add a refinement to all this to prevent stamp from being a pure wealth tax, I'd only charge it on the capital gains section of the sale price. It isn't perfect, of course stamp duty will still be a rubbish tax but shifting the burden like this should help around the margins.