Stamp Duty Changes & Budget 2025: Speculation mounts – an update for Homebuyers, Landlords and Investors

Date: August 26, 2025

As Autumn Budget 2025 approaches, which is widely expected in late October, property buyers, landlords and investors are bracing for further major tax reforms. Potential stamp duty reforms, a wealth tax, which could include UK mansion tax proposals and annual property tax charges are all being debated in the media. Understanding potential tax changes is crucial for anyone considering purchasing or selling property. Below, we explore the key areas the media believes the government is considering and discuss how you can prepare.

Published by Alexander & Co | Expert tax advisors specialising in the property sector

Stamp Duty Changes 2025: What Happened to SDLT Rates and Bands?

From 1 April 2025, the stamp duty land tax (SDLT) nil-rate band dropped from £250,000 back to £125,000, significantly increasing costs for those buying after this date. First-time buyers and existing homeowners face higher SDLT on purchases above the new threshold. For example, purchasing a property at £600,000 after the deadline could mean you are now paying an extra £2,500 in stamp duty.

Landlords and property investors will now also need to plan for the SDLT surcharge on additional properties, which rose from 3% to 5%, with the rate for property values between £125,001 and £250,000 rising to 7% for second homes and buy-to-lets. Those who are non-UK tax residents also pay an additional 2%. These changes, some of the most critical stamp duty surcharge increases for landlords to date in 2025, will now likely impact portfolio decisions and buy-to-let profitability.

Replacement of Stamp Duty with a National Property Tax?

It has widely been reported in the media that government proposals under review include a new “national property tax” on owner-occupied homes worth over £500,000. Unlike traditional SDLT, this would be a proportional tax on the portion of value above the threshold and could replace upfront stamp duty for higher-value properties. Rumours of the government replacing SDLT with a property transaction tax have driven significant interest, especially with approximately 20% of the UK housing market potentially impacted.

Wealth Tax / Mansion Tax and Annual Property Levy Proposals 2025

The media is also reporting that HM Treasury is considering a “mansion tax” or wealth tax on homes valued above £1.5million as part of UK mansion tax proposals for 2025. Under potential plans, higher-value main residences could lose full capital gains tax exemption, with 24% CGT for additional-rate taxpayers and 18% for basic-rate taxpayers.

There are also discussions about an “annual property tax on expensive homes”, with a recurring levy based on market value to boost long-term Treasury revenue and rebalance taxation for high-value properties.

Council Tax Reform 2025

Alongside rumoured SDLT and mansion tax changes, the national media is reporting that the government is considering council tax reforms. Proposals include aligning council tax banding more closely to current property values. Other speculation (since the 2024 election) has included the introduction of two or three additional higher bands.

How Homebuyers, Landlords and Investors Should Prepare

With the SDLT already increased in April 2025, with the potential for further changes and potential disruptive new property tax measures on the cards, timing will be crucial for buyers and sellers. Anyone looking to move or invest in property should:

Consider whether there are any benefits to completing property transactions before the autumn budget
Factor in the existing increased SDLT surcharges when reviewing investments
Monitor the Autumn Budget for any new national property tax or mansion tax announcements
Consult an experienced accountant or property tax specialist, such as Alexander & Co with regards to tax liabilities and calculations

Contact Alexander & Co for property tax advice

For professional advice on stamp duty or how any proposed UK mansion tax or wealth tax could affect you, contact the team at Alexander & Co. Our chartered accountants and tax advisors can advise on the best strategy for your circumstances in a changing property tax environment.