Property tax is once again under active review by the government, with speculation in the press ranging from a new ‘mansion tax’ to more fundamental changes such as replacing stamp duty or reforming council tax. These discussions highlight both the fiscal pressures facing the Treasury and the ongoing challenge of balancing fairness, revenue generation, and housing market stability.

Property investors and landlords have faced a series of tax and regulatory changes in recent years. In April 2025, stamp duty rates were increased for buy-to-let purchases, following earlier reforms to renters’ rights. At the same time, the Royal Institution of Chartered Surveyors (RICS) has reported that the availability of rental housing has declined for 11 consecutive months, a trend that risks putting further upward pressure on rents.

Unlike trading businesses, property investors do not benefit from the same reliefs for capital gains tax (CGT) or inheritance tax (IHT), and higher debt costs receive limited offset. Taken together, these factors have reduced the attractiveness of property as an investment class.

Recent reports suggest that the Treasury is examining the possibility of replacing stamp duty with a proportional property tax on homes sold for more than £500,000. Unlike the current one-off levy, which can distort behaviour around transaction thresholds, a proportional tax would rise in line with property values and affect a narrower segment of the market.

The government are also said to be considering an overhaul of council tax, which is still based on 1991 property valuations. Proposals include a shift to a modern, valuation-based local property tax collected from owners rather than residents.

Property-related taxes already account for around 10% of UK tax receipts, nearly double the OECD average, making them a key component of fiscal planning.

The government’s room for manoeuvre is limited. Commitments from the Chancellor to not raise income tax, VAT, or national insurance have shifted attention towards property as a more politically viable tax base. At the same time, a fiscal gap estimated at £40 billion has increased pressure to identify reliable revenue streams.

Property taxation is likely to remain at the centre of fiscal policy debates in the months ahead. While the government is exploring reforms intended to improve fairness and stability, the challenge will be implementing changes without discouraging investment or further reducing housing supply.

For landlords, investors, and businesses with property interests, the Autumn Budget could bring significant changes. Now is the time to review ownership structures, financing arrangements, and succession planning, so you are prepared to adapt quickly if reforms are announced. Speaking with your adviser early can help identify opportunities and mitigate risks in what remains a fast-moving tax landscape. 

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