Housing Tax Reform: What Might the Chancellor Change & What Should You Do Next?

With the Chancellor’s Autumn Budget just weeks away, the question of how we tax housing is front and centre once again. From speculation about a “mansion tax” to whispers of a new national property tax, property owners, investors, and landlords are understandably wondering what might be coming next.

At a recent debate hosted by the Chartered Institute of Taxation (CIOT) and the Institute for Fiscal Studies (IFS), leading economists, academics, and tax professionals came together to explore one big question:
How can we make the taxation of housing fairer, simpler, and more effective?

Here’s what they had to say and what it could mean for you.

Council Tax: Still Stuck in 1991

The panel agreed on one thing: the current council tax system is broken. It’s still based on property values from 1991, meaning two homes worth the same today can face very different tax bills simply because one was cheaper 34 years ago.

The system is also regressive – those with the most valuable homes pay proportionally less than those with modest ones. As one economist put it, “it’s indefensible.”

Stamp Duty: A Tax That Stifles Movement

Stamp Duty Land Tax (SDLT) came under heavy criticism for being one of the most damaging property taxes economically. It discourages people from moving – whether that’s first-time buyers stepping up, families relocating for work, or retirees downsizing.

One view was blunt: “Stamp duty shouldn’t exist.”
They argue it would be better to abolish it entirely and recover the lost revenue through an annual property tax based on up-to-date valuations.

Balancing Reform with Practical Reality

Caroline Fleet, Head of Real Estate at Crowe UK and Vice Chair of CIOT’s Property Tax Committee, reminded everyone that housing is already one of the most heavily taxed sectors in the UK, touching at least a dozen different taxes — from SDLT and ATED to income tax, CGT, and inheritance tax.

She warned that while reform is essential, implementation will be complex. HMRC’s systems, the Land Registry, and local authorities would all need major upgrades to support new valuation-based taxes or deferral mechanisms for those who are “asset-rich but cash-poor.”

Property as a Store of Wealth & the Political Reality

Former Treasury official and crossbench peer Lord Turnbull gave a broader perspective: over the past 60 years, housing has shifted from being a basic need to a store of wealth. This has driven up prices, worsened inequality, and made it harder for younger generations to get on the ladder.

He argued that property-based taxation is the fairest and most efficient way to raise revenue — particularly compared to taxing labour or investment income — because housing is immovable and easy to value. But he also warned that piecemeal tinkering won’t work; it’s time for “someone to bite the bullet” and tackle valuation reform head-on.

What All This Means for Homeowners, Landlords & Developers

Across all speakers, there were a few consistent messages worth taking to heart:

• A revaluation is coming. Whether in 2025 or later, taxing homes based on 1991 prices is no longer sustainable
• Stamp duty reform is likely. Expect some movement on rates or structure – potentially favouring regular annual taxes over large one-off costs
• Simplification is essential. There is strong professional appetite to align definitions and reduce the complexity of overlapping property taxes
• Cash-flow management will be key. If annual property taxes rise, planning for liquidity – or deferral options – will become increasingly important

Preparing for What Comes Next

Tax reform is never quick or straightforward, but the direction of travel is becoming clear. The government needs revenue, and property is a visible, relatively stable source. For investors, landlords and homeowners alike, now is the time to get ahead of the curve.

At UK Property Accountants, we recommend:

• Reviewing your property portfolio – understand current and potential tax exposures
• Stress-testing your financial models against higher ongoing property taxes and lower transaction costs
• Exploring ownership structures that offer flexibility if new valuation-based taxes are introduced
• Seeking professional advice early – especially if you’re planning disposals, transfers, or acquisitions in the next 12–24 months

Conclusion

The UK’s property tax system hasn’t seen real reform in decades. As one panellist put it, “It’s not the result of intelligent design – more like a random walk.”

That may be about to change. The challenge for the Chancellor is to design a system that’s fair, efficient, and deliverable. The challenge for property owners is to be ready when she does.