Chancellor Rachel Reeves is considering replacing stamp duty with a tax paid by the sellers of high-value properties.
It’s thought a national tax could be paid by owner-occupiers on houses worth more than £500,000 when they sell their home, based on the value of the property.
Meanwhile council tax could be replaced by a new local property tax.
The Chancellor is under pressure to consider more wealth-based taxes, with Angela Rayner, deputy prime minister, one of the notable proponents.
Simon Gerrard, chairman of Martyn Gerrard Estate Agents, said: “The existing Stamp Duty regime is unfit for purpose and has had a chilling effect on the housing market, which is why I’ve long campaigned to reform it.
“It’s good to see that the government has understood some of the issues and is taking action to end the broken system. Adding further costs to purchasing a home has only reduced transactions, stifled upward mobility and prevented the efficient functioning of the housing market.
“This new tax would be paid by the seller, rather than the buyer which means that it won’t be the same tax on aspiration that stamp duty currently is.”
He added: “However, it’s clear that the government is motivated by a desire to raise revenues and I’m concerned that this new tax is going to be punishingly high.
“If that’s the case, you’re going to see a ceiling at the £500k threshold for that band of the market, as people avoid falling under the regime, and then a significant jump in values with nothing in between.
“Prices above £500k will skyrocket as sellers account for the losses caused by the tax, that used to be paid by the buyer.
“What most worries me is the effect on families in London. The housing market is far higher in London, which means any family home will be impacted by this new tax.
“If prices surge higher because of this new regime, how will anyone in the capital start a family? The government needs to think very carefully what the wider repercussions these changes might have and act carefully.
“So far many of its attempts at raising revenues through tax, such as the stamp duty changes earlier this year, have backfired.”