“Having repeatedly ruled out increases to employee national insurance, income tax of VAT, Rachel Reeves has limited room for manoeuvre, but she needs cash, and fast,” she said.
“We have huge changes to Inheritance Tax already announced and looming, Business Property Relief and Agricultural Property Relief changes in April 2026, and Pension IHT changes from April 2027.
“Just one of the many rumours swirling about on the announcements we may hear in the Autumn 2025 Budget include changes to how tax is charged on properties.”
She said the options could include changes in how Stamp Duty Land Tax (SDLT) and Council Tax are levied.
“An abolition of SDLT would see prices rise and changes to thresholds would prompt price shifts, but what would SDLT be replaced with?
“There have been suggestions that changes to SDLT could be levied solely on main residences and not on second properties or commercial properties, and first time buyers, currently protected from SDLT up to a certain limit, would be offered the same protection under a new regime.”
Reports have been circulating that the Chancellor might replace SDLT or Council Tax with an annual property tax, and it has been suggested that this could be a 0.54 per cent tax levied on a home value between £500,000 and £1 million when bought, and 0.18 per cent on any value above £1 million.
Britton, a senior manager in the professional practice and private clients team at Crowe which has offices in Oldbury and Birmingham in the Midlands, pointed out: “This raises as many questions as answers. Who is getting the annual national property tax? Local councils or central government?
“How often is a property revalued? How is it revalued?
“And many have suggested that these changes would not increase revenues, so what would be the point of making them?
She said that an annual property tax would be a significant issue for those that are asset rich but cash poor.
Moving on to proposed changes on Capital Gains Tax (CGT) and Private Residence Relief (PRR) for properties valued over £1.5 million, she asked if these changes would simply be a rate change to all chargeable assets as forecasted before last year’s Budget, which did not happen, and will CGT rates be moved closer to income tax rates?
“If this only affected main residences, there would be a disincentive to sell.
“And if the Chancellor removes PRR on properties above a certain value, will there be a cliff edge threshold meaning that prices are skewed to reflect this?”
Britton added that further issues would come with the recording of allowable capital expenditure.
“Taxpayers are told to keep records for 22 months from the end of the tax year, and at most, where you are self-employed, for at least five years after January 31 following the end of the tax year, so many may not have retained records from several years ago to evidence deductible expenditure.
“Similarly, many may not even remember how much they purchased their main residence for.
“For CGT purposes and assets purchased before April 1 1982, the base cost applicable to calculating a gain or loss is not what the asset was purchased for, instead there is a rebasing, and the base cost is the value at March 31 1982.
“So there are many imponderables in the various versions of a new Property Tax that have been floated.
“It remains to be seen in the Budget, how the Chancellor will balance the need for quick cash against the knock-on effect on the property market and family inheritances.”
The Autumn Budget is expected to take place in late October or early November. No specific date has yet been announced.