WHAT TO WATCH IN BUDGET 2025: KEY ISSUES FOR HOMEOWNERS, MOVERS AND LANDLORDS

The upcoming Autumn Budget is being closely watched not just by businesses and investors, but also by homeowners, prospective buyers, sellers and landlords. With the government facing significant fiscal pressures, a variety of tax and housing-related reforms are being floated that could impact all sectors of the property market.

Here we outline the major themes that could feature in the Budget and what they might mean for you.

1. Property Tax Reform

A shake-up of property taxes looks increasingly likely, though it is not yet clear how far the government will go.

One idea possibly being considered is a complete overhaul of the system, replacing both Stamp Duty and Council Tax with a single, progressive property tax that would apply to all homes based on their current market value. Supporters say this could make the system fairer and improve mobility, as stamp duty currently penalises buyers who move.

However, the Treasury is also examining a less radical alternative: reforming the existing council tax bands. This could involve doubling rates for top-band properties or adding new higher bands to better reflect modern house prices. The Institute for Fiscal Studies estimates this could raise about £4 billion a year, but experts warn it would hit older, asset-rich but cash-poor homeowners hardest and might prompt some to sell to reduce costs.

Either way, the focus is firmly on higher-value homes, meaning many owners, particularly in London and the South East, could face higher ongoing property costs in the years ahead.

2. Capital Gains and a Possible “Mansion Tax”

There are two ideas are being discussed on this:

The first is ending the Capital Gains Tax exemption on main residences, meaning sellers could pay tax on profits from their own homes (24 per cent for higher-rate taxpayers and 18 per cent for basic-rate).

The second, is introducing an annual “mansion tax” which would be a 1 per cent levy on the value of properties worth more than £2 million, equal to about £10,000 a year on a £3 million home.

Once again, this would place added strain on those who are asset-rich but cash-poor. Although there are suggestions that the revenue could be redirected to help first-time buyers, such measures would not offset the pressure faced by existing homeowners who may struggle with rising annual costs on high-value properties.

3. Landlords and Rental Income

Landlords are also expected to come under scrutiny, on top of all the other changes landlords are already facing as part of the Renters’ Rights Act.

One proposal being examined is a new National Insurance charge on rental income. At present, rental profits are not subject to NICs, but it has been suggested that rental income could be subject to NICs at a rate of 8% up to £50,270 and 2% thereafter – mirroring the treatment of employment income.

If introduced, this could significantly affect yields and cashflow, and influence whether landlords keep or sell their portfolios.

4. Savings and Inheritance Tax

Beyond property, the Chancellor may look to raise revenue from savings and estates.

The cash ISA allowance could be cut from £20,000 to £10,000, while the full stocks-and-shares allowance would stay.

Inheritance Tax reforms are also being discussed, with possible changes to how high-value homes and family transfers are treated.

5. Support for Buyers

While many measures would raise tax, the government is likely to include some help for first-time buyers or those moving home, possibly through stamp duty exemptions or deposit support schemes.

Any changes could influence buyer behaviour and pricing, so both buyers and sellers should expect short-term uncertainty as the market adjusts.

7. What to Do Now

With the Budget just around the corner, the key message for anyone in the middle of a property transaction is to keep things moving. If you are buying, selling or completing a transfer, it is worth doing everything you can to finalise before any changes come into effect. For taxes linked to transactions like stamp duty or capital gains, timing really can make a difference, as these would apply to deals completed after the new rules are introduced.

When it comes to proposals such as council tax reform or a possible mansion tax, things are a little different. These would apply to property ownership rather than the act of buying, so whether you are affected will depend on how and when  he government decides to bring them in. Sometimes measures take effect immediately, while others are phased in or set for future tax years.

If you are close to completion, stay in regular contact with your conveyancer and agent to make sure everything stays on track.  If you are thinking about moving soon, keep an eye on the Budget announcements, a clear understanding of what is changing will help you plan your next steps confidently.

The Autumn Budget 2025 could redefine property taxation and ownership in the UK. While nothing is confirmed, it is clear that property is under closer scrutiny than ever.

At PCS Legal, we believe that being prepared matters. Early instruction, clear communication and proactive management can help you move with confidence, whatever the Budget brings.