Property Tax Reform: What to Expect from the Autumn Budget

Uncertainty surrounds the residential housing market as the Labour government proposes different tax schemes on property.

Summary

The upcoming Autumn Budget is stirring significant uncertainty in the UK property market. Buyers and sellers alike are closely watching proposed reforms to Stamp Duty, Council Tax, Capital Gains Tax, and landlord taxation. On the demand side, we are already seeing hesitancy from buyers who want clarity before making large commitments. On the supply side, while there has not yet been a noticeable influx of properties coming to market in anticipation of possible Capital Gains Tax changes, it would not be surprising if this uncertainty prompted some owners to bring forward their sales plans rather than wait.

Proposed Changes Under Discussion

1. Replacing Stamp Duty with a National Property Tax

The Chancellor is considering scrapping Stamp Duty Land Tax (SDLT) for owner-occupiers and replacing it with a national property tax. One option under review is a proportional levy starting on homes worth over £500,000, with higher rates for properties above £1 million (The Guardian; HomeOwners Alliance). Unlike Stamp Duty, which is payable upfront on purchase, the new tax could instead apply on disposal when a property is sold.

2. Council Tax Reform

Council Tax, long criticised as outdated and regressive, is also under review. The government is weighing a shift towards a local property tax or levy, with assessments based more closely on up-to-date property values (The Guardian). This would be a longer-term reform than stamp duty changes, but one with potentially wide-ranging regional impacts.

3. Capital Gains Tax (CGT) on High-Value Primary Residences

Perhaps the most sensitive proposal is to reduce or remove the Principal Private Residence Relief for high-value homes. This would mean that owners of expensive primary residences could face CGT on part of their gains when selling, something not currently applied to main homes (UK Property Accountants).

For prime property markets such as Hampstead homes, St. John’s Wood homes, and Belsize Park homes, where values are significantly above the UK average, this could have major implications. While the change has not yet triggered a rush of supply, sellers of high-value homes in these neighbourhoods are increasingly weighing whether to transact now to lock in the current tax treatment.

4. National Insurance on Rental Income

Landlords may also face new costs. At present, rental income is not subject to National Insurance Contributions (NICs). One proposal is to apply NICs to rental profits, bringing landlord income in line with employment and self-employment income (UK Property Accountants). This would further reduce net yields at a time when landlords are already squeezed by mortgage rates and existing tax restrictions.

5. Business Rates Reform for Small Enterprises

The government is also reviewing the business rates system, with a focus on making it easier for small businesses to expand. Currently, opening a second location can lead to the loss of small business rate relief, creating a sharp financial disincentive. Reform aims to smooth this so that growth is encouraged rather than penalised (UK Government; Reuters).

Implications for the Market

• Buyer Demand: Uncertainty around transaction taxes and potential ongoing property levies is already causing some buyers to delay decisions, particularly in the £1m+ segment where reforms would bite hardest. This is particularly relevant in high-demand areas such as Hampstead, St. John’s Wood, and Belsize Park, where most homes fall within the higher-value bracket.

• Seller Behaviour: While we have not yet seen a surge in listings prompted by Capital Gains Tax fears, owners of prime homes are actively considering whether to bring sales forward. If reforms are confirmed, we may see a short-term wave of “pre-Budget” sales in these neighbourhoods.

• Regional Inequality: High-value markets (London, South East) would shoulder the largest share of new levies, potentially cooling demand relative to other regions.

• Landlords: The addition of National Insurance on rental income could accelerate the trend of smaller landlords exiting the market, putting further pressure on private rental supply across North West London.

  
  

What This Means if You’re Buying or Selling in Hampstead, St. John’s Wood, or Belsize Park

For those active in the prime North West London property market, these proposals carry immediate relevance:

• Hampstead Homes: With many properties valued well above £2 million, Hampstead owners are likely to be among the most affected by potential CGT reforms and higher levies. Buyers, meanwhile, are carefully weighing whether to proceed now or wait until after the Budget for clarity.

• St. John’s Wood Homes: This market, already international in its buyer base, could see shifts in sentiment if overseas purchasers perceive the UK as less tax-efficient. That said, its reputation as a safe haven may sustain demand, albeit at more cautious levels.

• Belsize Park Homes: Sitting just below Hampstead in average pricing but still firmly in the higher-value band, Belsize Park may attract buyers priced out of Hampstead or St. John’s Wood if reforms push affordability questions further up the ladder. Sellers here are also keeping a close eye on CGT proposals, as many homes would exceed suggested thresholds.

In all three areas, timing may prove crucial. If reforms are confirmed, there could be a short-term window where motivated sellers bring forward transactions, creating opportunity for buyers ready to move quickly.

Conclusion

The Autumn Budget promises to be one of the most consequential for UK property taxation in decades. Whether through a new national property tax, council tax reform, CGT changes, or landlord levies, the direction of travel is towards extracting more revenue from property wealth.

For now, the uncertainty is shaping buyer psychology, while sellers in markets such as Hampstead, St. John’s Wood, and Belsize Park are beginning to assess their exposure. If proposals on CGT or new levies are firmed up, we may see short-term supply shifts as owners try to sell under the current regime.

In the meantime, buyers, sellers, and landlords alike should pay close attention to the upcoming announcements — and may wish to seek advice on how to plan ahead.

More on the Hampstead, Belsize Park, Primrose Hill and St. John's Wood Property Market

To see market statistics for the last half year in our operating areas of Hampstead, Belsize Park, Primrose Hill and St. John's Wood, check out our latest H1 2025 Market Reports for NW3, NW8, NW1.