Author: Phillips & Co Accountants, Chester
Date: 20 August, 2025
The UK property tax system could be about to change in a big way. In August 2025, reports indicated that Chancellor Rachel Reeves is exploring sweeping reforms designed to increase revenues and close the fiscal gap.
For homeowners and investors alike, these potential changes could have a significant financial impact — particularly at the higher end of the property market. At Phillips & Co Accountants Chester, we’re keeping a close eye on developments so our clients can prepare in advance.
What’s Being Considered?
1. Capital Gains Tax on Primary Residences
At present, when you sell your main home you don’t pay Capital Gains Tax (CGT) because of Principal Private Residence Relief. However, the Treasury is understood to be considering restricting this relief for properties valued above £1.5 million.
That would mean that if you own a high-value home, part of your gain on sale could become taxable — a first for UK homeowners. Even though this would affect a smaller segment of the housing market, it represents a major potential policy shift.
2. A Seller-Paid Property Tax
Another idea under review is a seller-paid property tax, which could replace Stamp Duty Land Tax (SDLT) for owner-occupied homes.
Think-tank modelling used in Treasury discussions suggests rates of:
0.54% for properties sold above £500,000
An additional 0.278% supplement for properties worth more than £1 million
It’s important to stress that these figures come from external modelling (by the think tank Onward) and are not yet government policy.
For buyers, a seller-paid levy could remove one of the biggest barriers to moving home, as SDLT often adds tens of thousands of pounds to transaction costs. For sellers, however, it would create a new financial burden at the point of sale.
Why Does This Matter?
If these reforms go ahead, the knock-on effects could be wide-ranging:
Homeowners at the upper end of the market may see reduced gains from selling, and potentially rethink when or if they move.
Buyers could find it easier to purchase homes without the upfront cost of Stamp Duty.
The housing market overall could see a shift in behaviour, with sellers under pressure to account for new costs.
For families in and around Chester, where property values have been steadily rising, this may become a real planning issue — even if your home doesn’t fall into the £1.5m+ category right now.
How to Prepare
Until these reforms are confirmed, nothing changes — but it pays to stay ahead of the curve. Some steps to consider:
Review your property portfolio – If you own multiple properties or investment assets, now is a good time to review potential exposure.
Consider timing – If you were planning to sell a high-value home, acting sooner rather than later may be tax-efficient.
Estate planning – Changes to property and Capital Gains Tax often have knock-on effects for inheritance tax planning.
Seek professional advice – Every situation is unique, and personalised guidance can make a huge difference.
How Phillips & Co Accountants Chester Can Help
At Phillips & Co Accountants Chester, we specialise in proactive tax planning for individuals, landlords, and company directors. Our team can:
Assess whether these potential reforms could affect you
Model the financial impact of a property sale under different scenarios
Identify opportunities to reduce exposure through timing, reliefs, or restructuring
Provide clear advice tailored to your property and wider financial circumstances
Final Thoughts
The proposed property tax reforms highlight a clear direction: wealth tied up in property is firmly on the government’s radar. Whether or not these measures come into force in their current form, homeowners should start thinking now about how they could be affected.
If you’d like expert guidance, contact Phillips & Co Accountants Chester today. We’re here to help you navigate change, minimise your tax liabilities, and plan confidently for the future.
Disclaimer
The information contained in this blog is for general guidance only. It does not constitute professional advice and should not be relied upon as such. Always seek tailored advice from a qualified accountant regarding your specific circumstances.