The Autumn Budget 2025 is fast approaching and, as always, there is a lot of speculation on how it might affect the property industry.
With the announcement set for 26th November, many are wondering what the Government might reveal, and how it might affect their next property move.
While nothing has been confirmed, several potential reforms are rumoured to be on the agenda. From Stamp Duty changes to tax changes on property and rental income.
Here we look at the main changes and what they could mean for you.
Stamp Duty Land Tax (SDLT)
Stamp Duty Land Tax is one of the biggest costs involved in buying a property, and the possibility of reform in the Autumn budget has been the subject of much speculation. The current position is that SDLT is the buyer’s responsibility and it must be paid within 28 days of completing a property purchase. This can greatly increase the upfront costs of buying a home. This is especially true for people buying higher-value properties or second homes, as well as those who may be on a tight budget.
One suggestion is that the Government could be looking at allowing buyers to spread the cost of SDLT over a longer period of time, rather than having to pay it all upfront. This could improve market buoyancy, as buyers who are currently stuck, waiting until they have saved enough for the SDLT payment, could potentially proceed more quickly or even immediately. At the moment there are no details on what an SDLT payment schedule may look like or how the tax would be collected; currently the conveyancers collect this tax from the buyer and pay it in one lump sum at the end of the transaction.
There has also been speculation that the responsibility for paying SDLT might change from the buyer to the seller. If this change goes ahead, it could help buyers by reducing the upfront costs when buying property, lowering the barrier to making a move happen, but sellers may claim that it is unfair and could lead to double taxation, having had to pay SDLT both on purchase and sale of their property.
It has also been reported that an annual property tax may be introduced for homes valued above £500,000. This could either replace or sit alongside SDLT, turning a large one-off payment into a recurring yearly payment based on property value.
It does appear that the Government recognises the current Stamp Duty Land Tax system is in need of change. Any changes announced in November are likely to aim at improving affordability, particularly for buyers trying to get onto or move up the property ladder. However, it is likely that the additional tax charges that apply for investors and second homes will remain.
Council Tax and Capital Gains Tax
A number of articles suggest that the possible SDLT changes could be part of a broader tax reform, with council tax also under review. One potential change is the introduction of higher council tax bands for high value properties, meaning owners of more expensive homes could face significantly higher council tax bills than they do currently.
This comes alongside growing criticism that the current council tax bands are based on outdated 1991 property valuations, which no longer reflect today’s housing market. Analysis by the Financial Times supports these criticisms showing that 55% of homes are in the wrong council tax band based on today’s property values.
There have also been increasing discussions about Capital Gains Tax (CGT) and how it applies to property sales. Right now, you do not pay CGT when selling your main home. However, there have been suggestions that this exemption may be limited for higher value properties and these could become subject to CGT upon sale.
Additionally, the CGT rate may be increased or different rates could be payable on different assets, such as second homes. The annual exemption allowance (how much profit investors can make before CGT is applied) could potentially also be reduced, however, both have already been changed in recent years. If implemented, these changes would mainly affect investors, second-home owners, and landlords selling properties.
While none of this is confirmed, these discussions suggest a move to generate more revenue from wealthier property owners, either without affecting, or limiting, the impact to the property market for lower-valued homes.
Rental Income and National Insurance (NI)
The way rental income is taxed may also be getting an update.
One key change being discussed is National Insurance (NI) being payable on rental income. Under the current system, landlords do not pay NI on the rent they receive; it is only paid by employees and those that are self-employed.
It’s unclear if NI payments for landlords were introduced, whether they would pay the same rates as employees or if an entirely new category would be created.
What It Means for Buyers, Sellers, and Investors
- For buyers: Shifting Stamp Duty to sellers or spreading payments could make homeownership more affordable.
- For sellers: A move to sellers paying Stamp Duty could reduce the amount people make from their sales, however this might be balanced out by demand from buyers if affordability improves.
- For landlords and investors: Potential National Insurance payments on rental income, or higher Capital Gains Tax rates, could reduce the profits they make from rental properties.
Until the official announcement on 26th November, this is just speculation and nothing is confirmed. However, with housing affordability and rental reform high on the Government’s agenda, there is a strong chance some of these changes will be announced in the Autumn Budget.
Whatever happens on the 26th it is important to understand how these changes could affect your next property transaction.
