Property portal Rightmove has issued a stark warning to the Government over leaked plans to overhaul property taxation, describing the proposals as potentially damaging and unfair.
The reported reforms – which include shifting Stamp Duty onto sellers, introducing an annual levy on homes worth over £500,000, and imposing Capital Gains Tax on properties sold above £1.5 million – could “stall the housing market” and punish homeowners, according to the company’s chief executive Johan Svanstrom.
“Be careful what you wish for,” Svanstrom cautioned Chancellor Rachel Reeves, warning that the Treasury may raise little additional revenue while leaving swathes of homeowners worse off.
Rightmove’s figures highlight the scale of the potential fallout. A third of properties currently for sale in England are valued above £500,000, rising to nearly 60% in London. In the North East, however, only 8% cross that threshold – fuelling fears of a new North-South divide in taxation.
The so-called “mansion tax” element would also hit London disproportionately, where 11% of homes sell above £1.5 million, compared with just 0.1% in the North East.
While first-time buyers stand to benefit from the abolition of tax on sub-£500,000 purchases, Svanstrom argued that the wider market could seize up. “If the burden shifts to sellers, recent buyers who already paid Stamp Duty will face a double hit. Downsizers may simply stay put,” he said.
He also warned of “distortions” at the £500,000 mark, with buyers and sellers rushing to complete transactions to avoid new charges.
“Stamp Duty reform is long overdue,” Svanstrom conceded. “But rushed, ill-considered changes risk paralysing the market rather than freeing it up.”