According to City AM, the Treasury is reviewing the idea as part of broader discussions with the Office for Budget Responsibility (OBR), set to begin next month.
Under the plan, homebuyers could pay stamp duty in instalments over time, rather than in a single lump sum at the point of purchase.
Imagine paying stamp duty bit by bit instead of all at once—that’s the idea floated by the Tony Blair Institute last year, suggesting a government loan to make it happen.
Economist Joe Nellis from MHA says the move could shake up the housing market if it goes ahead. He says: “Breaking stamp duty into instalments would lower the cash needed at the point of purchase, unlocking capital and giving buyers more breathing room for deposits, moving costs, and renovations. This could boost market activity, making it easier for households to move and potentially supporting housebuilders with stronger demand.
“But the policy comes with trade-offs. The Treasury would wait longer to receive revenue, adding to near-term borrowing needs. There is also a risk of missed payments if buyers default or sell before completing their instalments. Banks could treat the recurring tax as a financial commitment, trimming the amount they are willing to lend — partly reducing the affordability boost.
“Unless housing supply rises, spreading payments could simply push prices up by encouraging more demand into a market already short on homes. But if implemented carefully, the reform could help unlock transactions and improve market fluidity. Poorly designed, it risks being a short-term stimulus that leaves public finances exposed.”
This marks the latest proposal for property tax reform put forward by Chancellor Rachel Reeves and her team of political and civil service advisers.
Earlier in the week, a survey of estate agents revealed strong backing for another of Reeves’ initiatives — replacing stamp duty with an annual property tax, exempting all but the most expensive homes.
According to the poll, 44% of estate agents believe the new levy should target only high-value properties, while 79% support scrapping Stamp Duty Land Tax altogether without introducing a substitute.
Nearly two-thirds of respondents — 66% — expressed strong or moderate backing for the idea of shifting Stamp Duty Land Tax (SDLT) from buyers to sellers, while only 13% voiced opposition.
Meanwhile, speculation continues to swirl around possible reforms to capital gains tax, council tax, and inheritance tax, with recent government leaks suggesting these may be floated to gauge public and political response.