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Annual property tax

Journalist: Carmen Reichman, FTAdviser

ended 19. September 2025

Dear mortgage advisers

How do you feel about the prospect of an annual property tax to replace stamp duty? (I'm ignoring the countil tax element for now but feel free to reference that).

I've seen research that shows many homeowners feel it would be unfair, stop them from selling or upsizing and could present a financial burden if they do.

I guess if you do your calculations it could work out cheaper for those making their way up the housing ladder in regular intervals, ie if they don't hold on for too long.

What do you think? Have you been aproached by clients about it?

How do you feel about shifting stamp duty from buyers to sellers?

And have you got any alternative ideas that would be fairer?

Thank you!

7 responses from the Newspage community

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Eamonn Prendergast
Chartered Financial Adviser at Palantir Financial Planning Ltd
An annual property tax risks punishing homeowners for staying put, when the real fix is more homes. Replacing stamp duty with an annual property tax sounds tidy in theory, but in practice it risks becoming a long-term financial burden for millions. Homeowners who’ve worked hard to pay down their mortgage could suddenly find themselves facing a new yearly bill, regardless of income. That is completely unfair, it could trap people in homes they can no longer afford to keep, rather than freeing up the market. Moving the cost from buyers to sellers might ease the upfront barrier for first-time buyers, but it risks discouraging older homeowners from downsizing, which is exactly the opposite of what the housing market needs. A fairer approach would be to reform stamp duty itself, tapering it to reduce cliff edges and targeting reliefs where they have the most impact, like for first-time buyers and downsizers. The real solution lies in increasing housing supply, not simply shift
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Ben Perks
Managing Director at Orchard Financial Advisers
This will go down like a lead balloon. Homeowner’s that paid tax on entry to their home could also be required to pay again on exit. Double whammy. It will be unfathomably unpopular and cause homeowners to sit tight. The future of the property market will be as uncertain as the Chancellor’s.
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David Stirling
Independent Financial Adviser at Mint Wealth
An annual property tax replacing the current stamp duty system will certainly appeal to those climbing the ladder fast and regularly upsizing. By making it annual you are hitting retirees and by keeping it upfront you hit movers, someone is going to feel stitched up. Reforming property tax is like rearranging furniture, everyone wants a better lay out, but nobody wants to be doing the heavy lifting. In an already jittery property market, these proposals only serve to unsettle purchasers further.
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Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
Why does there have to be tax on everything? A more Friedmanist view would be to stop taxing people on everything if your economy needs a boost, leave more money in the pocket of the people who will go out and spend and invest it. If Rachel Reeves wants a boost to the economy she needs to stop taking money out of the economy from the people who would spend it, and target taxation more appropriately to redistrubute wealth from those who only use their money as a store of wealth. It's time to tax the rich.
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Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
Stamp duty is a transactional tax that discourages people from moving, downsizing or upsizing. I think an annual property tax is fairer because it targets the unearned gains from rising house prices, making it a more progressive approach.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
An annual property tax replacing stamp duty is economic vandalism disguised as progressive reform. This policy turns homeownership from an asset into a subscription service where the government becomes your permanent landlord, collecting rent on property you already own.

People are genuinely terrified about this prospect, particularly retirees who bought modestly decades ago and now face the possibility of annual bills that could exceed their heating costs. The idea that frequent movers benefit assumes people want to treat homes like rental cars, constantly upgrading rather than building communities and equity.

Shifting stamp duty from buyers to sellers creates a different nightmare scenario. Downsizers already struggling with inflated property prices will face additional tax burdens precisely when they need to release equity for retirement. This will freeze the top of the property chain, preventing natural circulation and trapping families in oversized homes they no longer need.
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Austyn Johnson
Founder at Mortgages For Actors
When you look at what Stamp Duty actually was set up for (war funds in the late 1600's), its definitely time for some sort of reform. The fact that we are taxed left right and centre every month should be taken as one of the perks of living in a 1st world country, why not add one more hole to the bucket. It may make it easier to buy a home though, you wont need to save up a deposit AND a stamp duty fund, but it will affect affordability and you will probably be able to borrow less due to the extra. Do you ever get the feeling that when one thing gets sorted, it creates another problem? Thats politics.
Shifting the tax liability to sellers will mean the market slowly grinding to a halt on higher value properties, especially those looking to downsize, so also then, it would affect any interest only mortgage where the repayment was to downsize... Maybe we should just think about what the stamp duty payment really is used for now. Maybe changed to 'treasury tax' or something transparent.