The Autumn Budget 2025.

Budget 2025: What Rachel Reeves Might Do to Your House Sale

The property rumour mill is in overdrive. Rachel Reeves delivers her Budget in a few weeks, and speculation about housing policy is everywhere.

Stamp duty reform. Capital gains on main residences. Changes to inheritance tax. Restrictions on second homes. Every property WhatsApp group in the country is sharing increasingly panicked theories about what’s coming.

Let me separate the realistic from the ridiculous, explain what might actually affect your sale or purchase, and suggest what you should – and shouldn’t – be worrying about.

The Stamp Duty Situation

Stamp duty is the obvious target. It’s unpopular, economically damaging, and ripe for reform. The question isn’t whether Labour will touch it – it’s how.

What’s being rumoured:

• Scrapping the temporary first-time buyer relief
• Reducing or removing the £250k nil-rate band
• Increasing rates on properties over £1.5m
• Introducing a seller’s stamp duty instead of a buyer’s tax

What’s realistic:

The first-time buyer relief is probably safe for now. Removing it would be politically toxic and counterproductive if Labour genuinely wants to help young buyers. They might adjust it, but scrapping it outright seems unlikely.

The £250k nil-rate band is more vulnerable. It costs the Treasury billions annually and disproportionately benefits the South East. A reduction to £200k or £150k wouldn’t be shocking.

Higher rates on expensive properties are almost certain. Labour has consistently argued that the wealthy should pay more, and stamp duty on £2m+ properties is an easy target. Expect increases in the higher bands – potentially up to 15-17% for properties over £2m.

A seller’s stamp duty is the interesting one. Several think tanks have proposed switching from buyer to seller taxation, arguing it would improve liquidity and help first-time buyers. The idea has merit, but implementation would be complex. If it happens, it won’t be immediate – it would require a transition period.

What this means for you:

If you’re buying under £1m in London, expect stamp duty to stay roughly the same or increase marginally. Budget for 3-5% of your purchase price as stamp duty, and you’ll be fine.

If you’re buying over £1.5m, budget conservatively. Assume stamp duty could increase by 1-2 percentage points in the higher bands. That might mean £20k-50k extra depending on your purchase price.

If you’re selling, watch for seller’s stamp duty proposals. If they introduce it, there will likely be a transitional period where you can choose which system to use.

Capital Gains Tax: The Big Fear

This is where the panic really lives. There’s persistent speculation that Labour might extend capital gains tax to primary residences – meaning you’d pay tax on the profit when you sell your home.

What’s being rumoured:

• Full CGT on main residences above a certain threshold
• CGT on gains over £100k or £250k
• Exemptions for downsizers or over-60s
• Partial taxation of primary residence gains

What’s realistic:

Full CGT on primary residences would be political suicide. The UK has a deep cultural attachment to the idea that your home is your wealth and the government shouldn’t touch it. Even Labour knows this is a third-rail issue.

Partial taxation is more plausible but still unlikely in the near term. You could imagine a system where gains over £500k become partially taxable, with exemptions for people who’ve owned their primary residence for decades. But implementing this without catching millions of ordinary homeowners would be technically complex and politically fraught.

The most realistic scenario is that CGT on main residences stays off the table entirely. Labour has too many other revenue options that don’t involve taxing people’s homes.

What this means for you:

Probably nothing. If you’re selling your primary residence, CGT almost certainly won’t affect you in this Budget or the next few years.

If Labour does eventually move on this – and that’s a big if – there would be extensive consultation, a lengthy implementation period, and significant exemptions.

Don’t rush a sale because you’re worried about CGT. It’s not coming imminently, and if it does come, you’ll have plenty of warning.

Inheritance Tax and Property

Inheritance tax is deeply unpopular and politically divisive. It affects a relatively small percentage of estates but generates disproportionate anxiety.

What’s being rumoured:

• Reducing the IHT threshold from £325k
• Removing the residence nil-rate band (additional £175k for passing homes to children)
• Increasing IHT rates above 40%
• Restricting reliefs and exemptions

What’s realistic:

Labour has historically supported IHT as a wealth tax, so some tightening is plausible. The residence nil-rate band is vulnerable – it’s complex, benefits only homeowners, and costs the Treasury billions.

Reducing the main threshold seems unlikely – it’s been frozen at £325k since 2009, and reducing it further would hit too many estates Labour claims to support.

More likely is restricting how the residence nil-rate band works or introducing new rules around property held in trusts or transferred before death.

What this means for you:

If your estate is likely to exceed the IHT threshold and you’re doing property-based inheritance planning, speak to a solicitor about potential changes. But don’t make drastic decisions based on speculation.

IHT is a long-term planning issue, not an immediate concern for most property transactions.

Second Homes and Buy-to-Let

This is where Labour has been most explicit about its intentions. They want to discourage second home ownership and have hinted at various measures.

What’s being rumoured:

• Increased stamp duty surcharge on second homes (currently 3%)
• Council tax premiums on empty or second homes
• Restricting mortgage interest relief for landlords further
• Capital gains tax increases on investment properties

What’s realistic:

Nearly all of it. Labour views second home ownership and buy-to-let landlordism as part of the housing crisis problem. Expect significant action here.

The stamp duty surcharge could increase from 3% to 5% or even higher. Council tax premiums on second homes and empty properties are already happening in some areas and will likely expand nationally.

Mortgage interest relief has already been restricted significantly for landlords. Further restrictions are plausible, though there’s not much left to restrict.

CGT on investment properties could increase, aligning more closely with income tax rates. If you’re a higher-rate taxpayer selling a buy-to-let, budget for potentially 30-40% CGT rather than the current 28%.

What this means for you:

If you’re buying a second home or investment property, do it before the Budget if possible. The surcharge will almost certainly increase.

If you’re a landlord considering selling, the CGT environment is unlikely to improve. If you’re planning to exit the market in the next few years anyway, sooner might be better than later.

If you own an empty property or second home, expect higher holding costs through council tax premiums.

First-Time Buyer Support

Labour has committed to helping first-time buyers, but the details are vague.

What’s being rumoured:

• Expanded Help to Buy schemes
• Shared ownership improvements
• First-time buyer stamp duty relief expansion
• Deposit support programs

What’s realistic:

Some form of expanded support is likely, but it probably won’t be transformative. Labour doesn’t have unlimited fiscal room, and housing support is expensive.

The stamp duty relief for first-time buyers will probably be protected or marginally expanded. Shared ownership might see improvements to make it more attractive.

The bigger issue is that most first-time buyer problems aren’t about lack of government support – they’re about property prices being too high and mortgage affordability being too tight. Labour can’t fix those through Budget measures.

What this means for you:

If you’re a first-time buyer, you’ll probably see marginal improvements in support schemes. But don’t expect anything revolutionary that suddenly makes buying affordable if it wasn’t before.

Focus on realistic affordability, not hoping the Budget will solve your deposit problem.

Planning and Development

This won’t feature heavily in the Budget itself, but Labour’s planning reforms will affect property values and development potential.

What’s being planned:

• Relaxed planning rules for urban densification
• Greenfield development restrictions
• Fast-tracking for affordable housing
• Changes to permitted development rights

What’s realistic:

Labour is serious about building more homes, which means planning reform is coming. If you own a property with development potential – a large garden, off-street parking, a flat roof that could support another floor – the rules around what you can do with it might change.

This cuts both ways. Easier planning might mean more conversion and development in your area, which could affect your property’s character and value. But it might also mean your own property has more development potential, which could increase its value.

What this means for you:

If you’re buying a property partly for its development potential, pay attention to planning reforms. What’s difficult now might become easier, and vice versa.

If you’re selling a property with development potential, highlight it in your marketing. Planning reforms could make development potential more valuable.

The Things You Shouldn’t Worry About

Let’s kill some of the wilder rumours:

Annual property wealth tax: Not happening. Too complex, too unpopular, too administratively difficult.

Rent controls: Possible in some form eventually, but not in this Budget and not imminently. The policy detail is too complex to rush.

Forced sales for empty homes: Some areas have powers to do this, but it’s not a Budget issue and won’t affect normal transactions.

Restricting foreign ownership: Politically popular but economically complex. If it happens, it’ll be phased in gradually with exemptions.

What You Should Actually Do

Don’t panic. Budget speculation is worse than Budget reality almost every time. The rumoured measures are usually more extreme than what actually happens.

Don’t rush decisions. Unless you’re buying a second home or investment property where the stamp duty surcharge might increase, there’s no need to accelerate your timeline based on Budget fears.

Budget conservatively. If you’re buying, assume stamp duty might increase marginally and factor that into your affordability calculations. If you’re selling an investment property, assume CGT might be higher than current rates.

Get proper advice. If you have complex property holdings, inheritance planning concerns, or significant tax exposure, speak to an accountant or tax advisor. Reddit threads and WhatsApp speculation aren’t a substitute for professional advice.

Focus on fundamentals. The market is driven by employment, interest rates, and supply-demand dynamics far more than Budget measures. Buy or sell based on your life circumstances and the market fundamentals, not speculation about marginal tax changes.

The Bottom Line

Most Budget speculation is overblown. The actual measures will probably be less dramatic than the rumours suggest.

If you’re buying or selling your primary residence, the Budget is unlikely to significantly affect you. Stamp duty might change marginally, but not enough to alter your plans.

If you’re a second home owner, landlord, or have complex property holdings, pay attention. Labour is likely to tighten rules and increase taxes in those areas.

For everyone else, the advice is simple: carry on. Make decisions based on your circumstances and the market as it actually is, not as Twitter speculates it might become.

And if your estate agent is pressuring you to “sell before the Budget” without explaining specifically which measures would affect you and how, find a better estate agent.