As new Labor MP Andy Burnham prepares to become prime minister, reforming one of the UK’s most controversial property taxes – stamp duty – could be high on his to-do list.
Stamp duty reformers say the tax is a hindrance to housing affordability, especially with high home prices, rising costs of living and mortgage rates.
Tax apologists point out that stamp duty will generate £10.3bn in England and Northern Ireland by 2024/25.
Although small compared to income tax (£310.3bn) or National Insurance (£159bn), this still generates enough cash to fund the country’s prison system for a year.
Like the move-in tax, it discourages moving… and acts as a barrier to people accessing housing that best suits their needs.
Burnham has previously supported the removal of stamp duty and council tax instead of annual property tax, and the debate intensified after a cross-party parliamentary committee concluded that the current system was no longer fit for purpose.
The Housing, Communities and Local Government Committee launched a strong criticism in June.
It said: “Stamp duty reduces the affordability of home ownership, slows down the property market and ultimately hurts the economy…. Stamp duty cannot be kept as it is and needs to be changed.”
Members of Parliament have called for a full review. Options included reducing rates, revising limits to reflect regional prices, reforming grants and exemptions, or replacing both stamp duty and council tax with recurring property tax.
Many in the industry argue that the problem is structural rather than simply overdue.
JLM Mortgage Services group director Sebastian Murphy says: “The debate over stamp duty has finally moved beyond the mortgage industry and into parliament itself.
Replacing stamp duty and council tax with a lower annual property tax is an ambitious idea
“For years … real estate experts have been warning that taxing people every time they move into a home is like putting a brake on the housing movement.”
Murphy says the impact goes beyond individual consumers. Older homeowners tend to stay put because downsizing attracts higher taxes, reducing the supply of housing for large families.
“No one is suggesting that the changes are straightforward,” he said.
“But we can’t ignore the impact it has on sales…. A serious review of limits, rates and potential alternatives is long overdue.”
L&C Mortgages communications director David Hollingworth agrees that stamp duty creates unnecessary tension in the housing market.
“Everyone will agree that the stamp duty works as a deterrent,” said Hollingworth.
The intervention of a cross-party committee has moved the issue beyond industry circles and mainstream politics
“Once you’ve taken the initiative to digitize and streamline the home buying process … it seems like a no-brainer to have something like stamp duty.”
Hollingworth continues: “One of the latest benefits is that you have to review council tax and stamp duty together.
He notes, however, that any annual property tax would need to be carefully designed to avoid unfairly penalizing homeowners who have increased in value over time.
Propertymark’s head of policy and campaigns Timothy Douglas says stamp duty has become a tax on moving house rather than wealth.
“Propertymark has been arguing that the stamp duty is in need of significant reform,” he said.
“Like a tax on moving home, it discourages moving … and acts as a barrier to people finding housing that best suits their needs.”
Once you’ve moved to digitize and streamline the home buying process… it seems like a no-brainer to have something like stamp duty
He adds: “Our view is that the UK government should carry out a comprehensive review… with the aim of reducing tax rates across the board and setting the stage for abolishing the tax altogether.”
Duncan & Toplis head of tax Nicholas Smith says Burnham’s previous support for the Fairer Share campaign shows a willingness to consider alternatives, but warns implementation will be challenging.
“Replacing stamp duty and council tax with a lower annual property tax is an ambitious idea,” said Smith.
“One of the key challenges is that a standard, accurate measurement of properties across the UK is difficult to assess.”
He also warns that regional differences could leave some landlords, particularly in London and the South East, facing higher annual bills.
The Conservative Party has promised to end stamp duty if elected, with shadow chancellor Mel Stride recently describing it as a “bad tax” and a “tax on ambition”.
For years… real estate experts have been warning that taxing people every time they move into a home is disruptive to moving.
Knight Frank, head of global research, Liam Bailey, says transaction tax discourages people from moving to work or downsizing later in life, adding that the intervention of the cross-party parliamentary committee has moved the issue beyond industry and mainstream politics.
At the time of writing, Burnham is expected to enter Downing Street as the new Labor prime minister, having shown his support for property tax reforms.
Whether the result is a few adjustments, a significant change or no change remains impossible to predict.
However, as political pressure on the tax mounts on all sides, and announcements of change increase, the debate over stamp duty shifts from whether change is necessary to whether such change is possible.
This article appeared in the July/August 2026 issue of Mortgage Strategy.
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