Stamp Duty Changes on the Horizon? Why Landlords Shouldn’t Panic
In the latest instalment of our Property Prognosis with Dr. T video series, Dr. T takes a closer look at one of the hottest topics in UK property right now: stamp duty land tax (SDLT) and whether major changes could be coming in the Autumn Budget.
With the Labour government under pressure to balance the books, new tax policies are being discussed – and stamp duty is firmly in the spotlight. This has left many landlords and investors worried about rising costs. But as Dr. T explains, while speculation is rife, the fundamentals of the property market remain strong.
Why Landlords Shouldn’t Panic
In his video, Dr. T reminds viewers that in his nearly 50 years of experience in the UK property market, governments have introduced many tax changes. Each time, landlords worry – and each time, the market adjusts.
The reason is simple: supply and demand drive property values and rents, not short – term taxes.
- When landlord costs rise, rents eventually rise too.
- If some landlords exit the market, competition decreases, and those who remain often see stronger returns.
- Just as supermarkets raise food prices when wholesale costs increase, landlords adjust rents when tax burdens go up.
For investors, this means that while taxes may create temporary disruption, property remains one of the most resilient long – term investments in the UK.
A Refresher: How Stamp Duty Works Today
Before exploring possible changes, Dr. T outlines how stamp duty currently applies:
1. Standard Stamp Duty
- Paid on all residential purchases.
- Rates increase with property value.
- A £1,000,000 London property, for example, attracts £43,750 in SDLT.
2. Additional Property Surcharge
- An extra 5% if you already own another home or buy through a company.
3. Non – Resident Surcharge
- A 2% surcharge if you’ve spent more than six months outside the UK in the 12 months before completion.
For many buyers, especially in London – the cost is staggering. A £1.5 million family home, for example, comes with a stamp duty bill of £94,000.
What the Government Might Do
According to Dr. T, several reforms are being floated. Each could reshape the market in different ways:
1. Scrapping Stamp Duty (Partially)
The most exciting rumour is that stamp duty might be abolished. This would encourage more movement in the housing market and reduce upfront costs.
However, Dr. T notes it’s more likely that abolition would apply only to owner – occupiers, not investors. Buy – to – let buyers would probably still pay SDLT.
2. Making Sellers Pay
Another proposal is shifting the tax burden from buyers to sellers. While this could help buyers secure mortgages (since SDLT is usually an upfront cash cost), property prices would likely adjust upward, making the long – term effect minimal.
3. Replacing SDLT and Council Tax with a New Annual Levy
A more radical idea is to scrap both SDLT and council tax in favour of a new annual property tax:
- Charged only on properties bought in the future.
- Scaled to property value, with expensive homes paying more.
- Lower – value homes potentially exempt or charged a flat low rate.
This could reshape demand significantly. Affordable homes under £500,000 might become more attractive, while very expensive properties could stagnate.
Could These Changes Help or Hurt Investors?
The impact of reforms depends heavily on the details. For example:
- If SDLT is removed for homebuyers but not landlords, buy-to-let investors gain little.
- If a new annual levy applies, landlords may face higher ongoing costs – but in the long run, these would likely be absorbed into higher rents.
Dr. T’s key point is clear: the market adapts. Costs passed to landlords don’t disappear – they are shared with tenants through higher rents, ensuring investment returns remain sustainable.
“The market adapts. Costs passed to landlords don’t disappear - they are shared with tenants through higher rents, ensuring investment returns remain sustainable”
The Bigger Issue: Housing Supply
One of the most important insights from Dr. T’s video is that tax reform won’t fix the real problem: the UK’s chronic undersupply of housing.
For decades, governments have promised to increase construction. Yet housebuilding remains slow due to:
- High land and labour costs
- Rising materials prices
- Green regulations and EPC standards
- Complex planning rules
- Limited profitability in building low – cost housing
In fact, in parts of the North of England, building a new house can cost two to three times more than buying an existing one. As Dr. T explains, this makes large – scale affordable housebuilding unattractive to developers – and ensures the UK housing shortage will persist for years to come.
What It All Means for Investors
For property investors, Dr. T offers reassurance:
- Stay calm – Tax reforms come and go, but demand and supply fundamentals drive the market.
- Expect some changes – Whether SDLT is scrapped, shifted, or replaced, the impact will vary – but not derail the market.
- Affordable homes remain strong investments – Lower value properties are more likely to be protected from heavy taxation and remain in demand.
- Think long-term – With population growth continuing and supply constrained, both rents and property values will rise over time.
Final Thoughts from Dr. T
As Dr. T concludes in his latest Property Prognosis video:
“The UK property market is a competitive market where pricing is determined by supply and demand. Any cost increases for property owners will get balanced by rent increases on tenants because supply is limited and demand is high.”
So while stamp duty reform may grab headlines, the fundamentals haven’t changed. The UK housing market remains resilient, and investors who take a long – term perspective will continue to benefit.
Watch the full video on YouTube.
