It’s being reported that the chancellor, Rachel Reeves, is considering a radical shake-up of property taxation, potentially replacing stamp duty with an annual property levy for homes over £500,000. If that’s true, and all signs point to a major announcement on 26 November, then brace yourself: the housing market, already subdued, could be in for a major shock.
The Treasury is scrambling to fill a £30bn black hole. Stamp duty may be on the way out – whether through Labour’s plans or under the Conservatives, if re-elected to power. But don’t mistake this for a tax cut. Instead, we’re likely to see an annual property tax under Labour, which could push homeowners’ bills up by thousands of pounds a year. Where are people, many of whom are already struggling, supposed to find that kind of cash?
It’s not just property taxes under the microscope either. Rumours are swirling about a raid on pension pots — yet another quiet attempt to squeeze more out of those who’ve saved responsibly all their lives. So we’re now facing a situation where people could be taxed out of their homes and out of their retirement funds. It’s a double whammy for middle Britain.
There’s also talk of applying capital gains tax to main residences, which could wipe billions of pounds off the UK economy. That’s not just a housing issue — that’s a national financial crisis in the making.
And who’s buying anyway? First-time buyers are already stretched. Upsizers are hesitant. Landlords are exiting. Construction is slowing. So what exactly are we hoping to stimulate? Even with planning permission, developers aren’t building — there’s no incentive, no workforce and no confidence.
Against this backdrop, we’re also being told the Government is planning a major overhaul of the home moving process and estate agency sector. According to newly appointed Housing Secretary Steve Reed, these massive changes including mandatory upfront information, optional binding pre-sale contracts and a whole raft of minimum qualification requirements for agents.
Apparently, this will cut transaction times by four weeks, halve fall-throughs and save first-time buyers £710. In principle, I support reform — we’ve been calling for more transparency and professionalism for years. But let’s not pretend these are new ideas. Upfront information, logbooks and digital IDs have been floating around for years.
As ever, estate agents will be expected to foot the bill and pick up the pieces. We’re told this will ‘drive up standards’, but how about addressing the delays caused by conveyancing and the dire shortage of skilled trades holding back housebuilding?
Meanwhile, if Reeves’ property tax proposals go ahead, agents should prepare for a flood of downsizers — not through choice, but necessity. And make no mistake, these won’t be happy movers. These will be pensioners forced to leave the homes they’ve built their lives around. The emotional toll is real and the political backlash will be even more so.
We need to act fast. Get the messaging right. There’s no shame in downsizing but it’s tragic we’re even here. For generations, home ownership has been the foundation of British society. An Englishman’s home is his castle, as the saying goes (though that needs rewriting in this modern day and age!). If we start taxing people out of their homes while raiding their pensions and rewriting the rules of agency, we’re not reforming — we’re dismantling.
Rachel from Accounts may be balancing the books, but if she’s not careful, she’ll tip the whole market over in the process.
So here’s my message to government: don’t confuse reform with revenue-raising. If you want a fairer system, start by cutting transaction costs, incentivising new homes and supporting skilled labour. Don’t punish aspiration. Don’t penalise pensioners. And don’t spring changes on a sector already shouldering the burden of broken systems elsewhere. Engage with us — the people who live and breathe this market every day — before you take decisions that could derail it for years to come.
Paul Smith is chairman and founder of Spicerhaart.
Kier Starmer refuses to rule out property tax rise during PMQs
Read the orginal article: https://propertyindustryeye.com/is-rachel-from-accounts-about-to-blow-up-the-property-market/
