Benham and Reeves warns the proposed seller property tax an attack on London home sellers

The latest analysis from London estate agent, Benham and Reeves, has revealed that the government’s proposed replacement of Stamp Duty with a seller-paid property tax would fall disproportionately on London, with around a third of homes currently listed across England priced above the £500,000 threshold that has been suggested, rising to 60% in London.

According to reports, Chancellor Rachel Reeves is considering scrapping Stamp Duty Land Tax (SDLT) and introducing a proportional property tax on home sellers, with rates applying to properties valued above £500,000. The move, currently under Treasury review, is intended to reduce barriers for buyers but would instead concentrate the tax burden on regions where higher-value homes dominate the market.

Benham and Reeves analysed current for-sale listings across England to see what impact the proposed changes could have on the nation’s home sellers, based on the proportion of homes listed for sale that currently fall at or above the potential £500,000 threshold.

The analysis shows that around one in three homes in England (30%) would fall subject to the tax if sold under these changes, due to boasting an asking price of £500,000 or higher.

However, across London this figure doubles, with 60% of all homes currently listed for sale sitting at or above this price threshold.

The South East sits in second place in this respect, however, with just 30% of all current property listings potentially impacted by the proposed sellers tax, it’s clear that Rachel Reeves has set her sights on penalising London home sellers in order to gain favour with the nation’s homebuyers.

Further analysis of the London market by Benham and Reeves shows which boroughs would be hardest hit.

In Kensington and Chelsea, 93.1% of all homes currently listed are priced above £500,000, while in Westminster the figure stands at 91.1% and in the City of London 89.5%.

Camden (82.8%) and Hammersmith and Fulham (81.0%) follow, with other central and inner boroughs such as Wandsworth (73.2%), Islington (72.3%), and Hackney (71.2%) also heavily exposed.

Even in traditionally suburban boroughs such as Richmond upon Thames (69.2%) and Lambeth (62.4%), the majority of homes fall above the threshold.

Marc von Grundherr, Director of Benham and Reeves, said,“The proposal to shift Stamp Duty onto sellers via a property tax on homes above £500,000 may sound like a progressive move at a national level, but in reality it’s a tax on London, designed to win favour with the nation’s homebuyers at the expense of the capital’s home sellers.

In the capital, £500,000 does not buy a luxury home; in many areas it’s simply the baseline for an average property. By targeting this price bracket, the Treasury risks penalising ordinary London homeowners, while leaving much of the rest of the country largely untouched.

If the government truly wants to create a fairer system, it must consider the significant regional variations in property values. Otherwise, this reform will not rebalance the housing market, it will simply add another barrier to selling in London at a time when transaction levels remain subdued.”