A leading thinktank has proposed replacing stamp duty and council tax with an annual proportional property tax to address London's housing crisis. The Centre for London report highlights widening housing inequality, with top-income households gaining more space while lower-income groups see minimal increases.
The proposed tax would be based on property value, with higher rates for expensive homes, and could fund 106,000 social and affordable homes over the next decade. It would save typical renters over £1,890 a year and first-time buyers £8,593 over five years of ownership.
The report notes record homelessness costs of £5.5m a day and a third of children in poverty after housing costs. It argues that stamp duty disrupts the market and both taxes incentivise holding onto property, with removal of stamp duty potentially releasing an extra 79,000 homes a year.
The thinktank says the reform could enable renters to save for deposits, which averaged nearly £150,000 for those buying without family assistance in 2024. However, it acknowledges that building more homes is necessary but not sufficient to solve the crisis.
