What could replace Stamp Duty? Exploring the alternatives.

Author: Ryan Etchells, Chief Commercial Officer at Together

Stamp Duty is not a particularly popular tax (if you could argue any tax was popular).

It comes at the worst possible time for cash-strapped house buyers, right when they’ve already splashed out on deposits, surveys, legal and mortgage costs, removals, and even marketing costs if selling a property as well.

It’s no wonder 101,910 people throughout Great Britain signed a petition asking for a full independent review of Council Tax and Stamp Duty, claiming that the latter is “a narrow, one-off tax that distorts the housing market and traps families in unsuitable homes.”

In this blog, we look at if Stamp Duty could be abolished, what the likely alternatives could be, and whether the tax is actually slightly misunderstood and in need of a minor realignment.

Is Stamp Duty being abolished?

No. Currently, the Stamp Duty changes made in April 2025 are still in effect, with the minimum threshold at which home buyers start paying tax set at £125,000.

It looks likely to stay this way until at least the Spring Statement in 2027, with our new Prime Minister Andy Burnham saying that he has no immediate plans to look at Council Tax and Stamp Duty as part of the Autumn Budget.

Could Stamp Duty be abolished?

Andy Burnham has previously said that he’d support replacing Council Tax and Stamp Duty so it wouldn’t be too difficult to see him abolish Stamp Duty during his term.

But the important part of that sentence isn’t ‘abolish’ but ‘replace’. In response to the petition, the government claim that Stamp Duty raised £16.6 bn last financial year and averages around £14 bn annually for the Treasury, funding essential services and infrastructure throughout the UK.

Scrapping Stamp Duty would leave a massive hole in the Budget which cannot be simply written off. So, what are the alternatives being suggested?

Land Value Tax

Let's start with the alternative that the new PM has previously voiced support for.

A Land Value Tax (LVT) is an annual charge based on the value of the land itself rather than the property built on it. The idea is that land values often rise because of local investment, improved infrastructure and public services, creating a recurring source of government revenue while encouraging productive land use.

Benefits of a Land Value Tax

• Homeowners wouldn't be penalised for improving their properties, as the tax is based on the land rather than the building.


• Developers would have less incentive to land bank, encouraging faster development and potentially increasing housing supply.


• Government revenue would be more predictable, providing a steadier income stream than Stamp Duty, which currently rises and falls with housing market activity.

Challenges of a Land Value Tax

• Land values would need to be assessed and updated regularly, creating a potentially complex and costly administrative process.


• Areas that experience rapid regeneration could see tax bills rise sharply, placing pressure on long-term residents.


• For many homeowners,the overall cost could eventually exceed today's one-off Stamp Duty charge.

Property Value Tax

Another potential replacement would be a Property Value Tax, calculated using the value of both the land and the property itself.

While this would remove the large upfront Stamp Duty payment, it is arguably the most controversial option because any improvements that increase a property's value could also increase the tax owed.

Benefits of a Property Value Tax

• Removes a significant upfront cost for buyers, spreading payments over a longer period.


• Valuations would be easier to understand and administer than land-only assessments because existing valuation systems already exist.


• Owners of higher-value homes would contribute more, creating a closer link between housing wealth and tax paid.

Challenges of a Property Value Tax

• Regular revaluations would still be required, particularly during periods of rapid house price growth.


• Homeowners could be discouraged from improving their properties, as additional value may lead to higher tax bills.


• Like a Land Value Tax, it's effectively a permanent charge that may cost considerably more over the lifetime of ownership than Stamp Duty today.

Purchase Value Tax

A Purchase Value Tax would be the closest alternative to the current system.

Rather than basing payments on future property or land values, the tax would be linked to the price originally paid for the property and then collected annually rather than upfront.

Benefits of a Purchase Value Tax

• Homeowners wouldn't be penalised for improvements or rising local values, as the tax would remain linked to the original purchase price.


• Administration would be relatively simple, removing the need for ongoing property or land revaluations.

Challenges of a Purchase Value Tax

• There would still be no clear endpoint to payments, meaning the long-term cost could exceed today's Stamp Duty bill.


• The value of revenues collected would gradually be eroded by inflation, creating challenges for government finances over time.

What if we reposition how Stamp Duty is paid?

As you can see, all the alternatives to Stamp Duty that we’ve discussed have their own benefits and flaws. However, the overriding theme seems to be that they will spread the cost over time instead of upfront but have no clear end or ultimate cost in sight.

So, if the main opposition to Stamp Duty is that it’s a big outlay at a time when buyers may already be stretched, why don’t we look to change when it’s paid?

Including a deferred monthly system, alongside the option to pay upfront, could offer buyers the best of both worlds. Homebuyers, including house flippers, who have the available funds could still clear their Stamp Duty liability immediately, while those trying to balance deposits, legal fees, removals and furnishing costs could spread the payment over an agreed period.

Unlike the alternatives we've discussed, the total amount owed would remain clear from day one. If a buyer's Stamp Duty bill was £5,000, they would continue to owe £5,000, perhaps plus a modest administration fee or interest charge to reflect the cost of spreading the payments. There would be a definitive end date, complete transparency and no risk of future tax increases caused by property appreciation, local regeneration or changing land values.

For the government, the tax would remain familiar, preserving a revenue stream that regularly contributes billions of pounds to the Treasury while avoiding the complexity of creating an entirely new property taxation system. The challenge, of course, would be managing the slower flow of revenue and the administration required to collect payments over a longer period. However, when compared with the large-scale valuation exercises required for Land Value Taxes and Property Value Taxes, it could represent a simpler transition.

Perhaps, then, the debate shouldn't be whether Stamp Duty should be abolished at all. Perhaps the more important question is whether we're collecting it in the right way.

For many buyers, the problem isn't necessarily the tax itself. It's being asked to find thousands of pounds at exactly the same moment they're making one of the biggest financial commitments of their lives. If a different payment structure could remove that pressure while maintaining certainty for buyers and revenue for government, it may be worth asking whether reform, rather than replacement, is the answer.

Whatever happens next with Stamp Duty, buying a home is likely to remain one of the biggest financial commitments most people ever make. Whether you're saving for a deposit, exploring your borrowing options or looking for a lender that can understand your circumstances, our team is here to help.