UK Committee Calls for Stamp Duty Reform Consultation by End of 2026 Alongside Council Tax Review

The Housing, Communities and Local Government Committee published a report calling for the Government to reform stamp duty and launch a consultation on alternatives by the end of 2026. The report said reform should occur together with changes to council tax. Stamp duty applies in England and Northern Ireland.

The nil rate threshold for first-time buyers fell from £425,000 to £300,000 in April 2025, while the zero rate threshold for home movers halved from £250,000 to £125,000. Buyers rushed to complete purchases ahead of those changes. The committee stated that stamp duty “puts barriers in front of people seeking to buy a new home,” reduces affordability, slows the property market, and damages the economy.

A consultation on alternatives should examine revenue-raising power, impact on market friction, progressiveness, and fairness, the report said. Options listed include a full replacement, rate reductions to stimulate sales, banding thresholds tied more closely to local prices, and updates to reliefs and exemptions.

The report also urged the Government to make it easier for councils to take control of empty properties by clarifying existing powers and offering new options to recover homes empty for the long term.

It noted that family support, often called the “bank of mum and dad,” now forms a major part of first-time buyer financing. Committee chairwoman Florence Eshalomi said rates of homeownership in England have declined over the last 20 years. “For many people, and especially for those unable to draw upon the bank of mum and dad, the prospect of owning a home is little more than a pipe dream,” she said.

Eshalomi added that no single solution exists but the Government can apply supply and demand measures to help people onto the property ladder. 5 million new homes in this Parliament is vital and that councils should receive greater powers to build homes and bring empty or under-occupied properties back into use.

The report recommended publishing annual homebuilding targets for each remaining year of the Parliament, with six-monthly updates on actions taken to increase private developer output.

It welcomed plans to replace the Lifetime Isa with a new homeownership product but said the product should not include a static price cap that would make it unusable in some regions. A Treasury spokesperson said first-time buyers pay no stamp duty on homes up to £300,000 and can claim relief up to £500,000, adding that the Government is cutting weeks off the buying process while saving first-time buyers £710 on average.

Henry Jordan, group director of mortgages at Nationwide Building Society, said any review should examine all property taxes to create a system that enables easier moves, is more progressive, encourages better use of housing stock, and accounts for ability to pay.