The government is considering a new national property tax as the first step towards a radical shake-up of stamp duty and council tax.

The discussions taking place at the Treasury – revealed by the Guardian on Monday – have already prompted much debate and, perhaps inevitably, led to an outcry in some quarters. Here we consider how the current system works and how it could change.

First, sources said Treasury officials were initially examining a potential new tax that would replace stamp duty on owner-occupied homes.

It would be paid by homeowners on properties worth more than £500,000 when they sold them. The amount paid would be determined by a property’s value.

Such a change would be a big deal because under the current system, stamp duty is paid by buyers, not sellers. It could be a bigger concern for some people living in London, the south-east and other areas where property prices are particularly high.

Second, officials are also said to be studying whether, after a national tax was brought in, a local property tax could then replace council tax in the medium term.

While a new national property tax could in theory be implemented during this parliament, overhauling council tax would take longer and would almost certainly require Labour to win a second term in 2029.

Source: The Guardian