Will stamp duty be replaced by an annual property tax? What's changed in 2026

No. Stamp duty has not been replaced by an annual property tax, and the government has said it won't change stamp duty at the Budget on 28 October 2026. What has changed is narrower: a new yearly charge on homes in England worth £2 million or more from April 2028, and higher income tax rates on rental profits from April 2027. Here's where each idea stands and what it means if you're buying, moving or letting.

Checked 17 September 2026. We first published this article in August 2025, when an annual property tax was being floated ahead of the 2025 Budget. We've rewritten it to show what actually happened.

Stamp duty

Unchanged

Rates in England and Northern Ireland are those in force since 1 April 2025. The Prime Minister ruled out changes at the October 2026 Budget

Annual property tax

Not policy

Replacing stamp duty and council tax with a yearly charge has been discussed, but no plan has been published

Homes worth £2m or more

£2,500+

A yearly surcharge of £2,500 to £7,500 on top of council tax, in England from April 2028

Landlords' rental profits

+2%

Property income taxed at 22%, 42% and 47% from April 2027 (not in Scotland)

Is stamp duty being replaced by an annual property tax?

Not at the moment. In summer 2025 there were reports that the Treasury was looking at scrapping stamp duty on homes and bringing in a proportional property tax, charged on the value of more expensive homes, alongside a possible overhaul of council tax. Neither idea made it into the Autumn Budget on 26 November 2025.

The idea returned in July 2026, shortly after Andy Burnham became Prime Minister. Weekend reports said the government was considering replacing stamp duty and council tax with a single charge based on property values. Downing Street called the reports speculation, and on 27 July Mr Burnham said a stamp duty change "won't be happening" at the coming Budget. He has continued to say council tax is unfair, so wider reform remains a possibility for later, but nothing has been proposed.

What happened to each property tax idea: status table

We are not tax advisers and this is not tax advice. This table is a general summary based on the rules and announcements published at the time of writing, and we make no warranty about the tax you will pay. Your solicitor or conveyancer will confirm any stamp duty due. Speak to a qualified tax adviser or accountant about your own circumstances.

Current stamp duty rates in England and Northern Ireland

Stamp Duty Land Tax (SDLT) applies in England and Northern Ireland. Scotland and Wales have their own taxes with different rates. These are the residential rates for a buyer who will own only one home after the purchase.

Three other points are worth knowing:

• First-time buyer relief only applies if everyone buying is a first-time buyer and the price is £500,000 or less.
• Additional homes, such as buy-to-let or second homes, pay a further 5% on top of each band. You may be able to reclaim this if you sell your previous main home within 36 months.
• Buyers not resident in the UK pay a further 2%.

Stamp duty is one of the costs lenders don't lend against, so it needs to come from your savings alongside your deposit. If you think you've been charged the wrong amount, our guide to why a second opinion on stamp duty can help explains what to check.

We are not tax advisers and this is not tax advice. These rates and examples are a general summary based on the rules published at the time of writing, and we make no warranty about the tax you will pay. Your solicitor or conveyancer will confirm the stamp duty due on your purchase. Speak to a qualified tax adviser or accountant about your own circumstances.

The £2 million "mansion tax": how the surcharge works

The High Value Council Tax Surcharge is the closest thing so far to an annual tax on property value, but it only reaches the top end of the market. The Budget said fewer than 1% of homes in England will be affected.

High Value Council Tax Surcharge: yearly charge by value band

England only, from April 2028, paid on top of normal council tax

1. A new valuationThe Valuation Office Agency will value homes likely to be worth £2 million or more, using 2026 values.
2. Owners pay, not tenantsThe charge falls on the owner, including companies and trustees, rather than whoever lives there.
3. Collected with council taxCouncils collect it alongside normal council tax, but the money goes to central government.
4. Rises each yearThe consultation proposed uprating charges by CPI inflation, with revaluations every five years and a right to challenge your band.

The consultation also proposed letting some owners who live in the home defer payment, and exempting some property types such as social housing. Details could change once the government responds.

We are not tax advisers and this is not tax advice. This is a general summary of the surcharge as announced and consulted on at the time of writing, and we make no warranty about the tax you will pay. Speak to a qualified tax adviser or accountant about your own circumstances.

What would an annual property tax mean? The ideas explained

The following are ideas and proposals from commentators, think tanks and past press reports. None of them is government policy. The versions discussed usually involve charging a yearly percentage of a home's current value, either instead of stamp duty or instead of both stamp duty and council tax.

In the United States, annual property taxes are the norm: they give steady funding, but bills can climb sharply with local prices. For borrowers, a yearly charge would also be a regular cost lenders may factor into affordability checks.

We are not tax advisers and this is not tax advice. This section describes proposals that are not law, based on information published at the time of writing, and we make no warranty about any tax you may pay. Speak to a qualified tax adviser or accountant about your own circumstances.

What it means for you

We are not tax advisers and this is not tax advice. These summaries are based on the rules published at the time of writing, and we make no warranty about the tax you will pay. Your solicitor or conveyancer will confirm any stamp duty due. Speak to a qualified tax adviser or accountant about your own circumstances. Most buy-to-let mortgages are not regulated by the Financial Conduct Authority.

How we can help

Tax rules affect how much cash you need and how much you can comfortably borrow. We can build stamp duty, and any future yearly charges, into your budget before you make an offer.

Quick Mortgages is a whole-of-market broker working with 110+ lenders, and our mortgage advice has no broker fees. We're based in Birmingham and help buyers, movers and landlords across the UK.

Speak to an adviser

Frequently asked questions

Is stamp duty being abolished in 2026?

No. As at 17 September 2026 there are no plans to abolish stamp duty, and the Prime Minister has said it won't change at the Budget on 28 October 2026.

Will council tax be replaced by a property tax?

Not under any published plan. The only confirmed change is the extra surcharge on homes in England worth £2 million or more from April 2028. Normal council tax continues alongside it.

What is the mansion tax and when does it start?

"Mansion tax" is the popular name for the High Value Council Tax Surcharge. It starts in April 2028 and costs £2,500 to £7,500 a year depending on the home's value.

What are the stamp duty rates for first-time buyers now?

0% up to £300,000 and 5% on the portion from £300,001 to £500,000. If the price is over £500,000, standard rates apply to the whole amount.

Should I delay buying in case stamp duty is cut?

There's no announced cut to wait for, and rates or prices could move in the meantime. It's usually better to plan around the rules that apply today.

We are not tax advisers and this is not tax advice. These answers are a general summary based on the rules published at the time of writing, and we make no warranty about the tax you will pay. Your solicitor or conveyancer will confirm any stamp duty due. Speak to a qualified tax adviser or accountant about your own circumstances.

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Disclaimer:

This article is for general guidance purposes only and does not constitute legal, financial, or professional advice. Mortgage products and their terms can vary, and it is important to seek advice from a qualified, regulated professional who can assess your individual circumstances. Please ensure you consider your unique needs before making any financial decisions.

While every effort is made to ensure that the information provided on this blog is accurate and up-to-date, we do not guarantee its completeness or accuracy. The mortgage market can change rapidly, and the information on this blog may become outdated. We recommend verifying any information before acting on it and seeking tailored advice.

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.