Forecasts for the Budget 2025: navigating property transactions

Each month, the Farrer & Co Residential Property partners give us a brief insight into their working lives. This month, we provide an overview of conversations that we have been having with clients as we prepare for the Chancellor delivering this year's Budget on 26 November 2025. 

The Brief 

The Government’s clear need to raise new revenue has sharpened attention on possible changes to property taxation in recent weeks, and the Residential Property partners were asked a series of questions against this backdrop. The video is available to watch here, and you can read on for an overview of what we had to say. 

Executing the Brief 

Do buyers exchange now or wait for the Budget? 

Historically, on Budget day, changes to SDLT have taken effect from midnight. As a result, some buyers may wish to explore creative options to retain flexibility. We can work with buyers to try and line up this flexibility – for example, by being ready to exchange before midnight on Budget day if changes announced are expected to be unfavourable, or waiting until the following day if the reforms are likely to be beneficial.  

However, each buyer and transaction is different, and of course sellers will have their own views on the risks around potential changes to principal private residence relief and capital gains tax (CGT). 

Do we have a crystal ball or any inside views of SDLT? 

Unfortunately we do not. So along with everyone else, we will be watching the Chancellor’s Budget announcement on 26 November.  

We know the Government is going to want to increase tax receipts and will also want to avoid disruption to the market, and there are a number of ways in which they might achieve this. 

We feel that if there is going to be a radical overhaul of SDLT it is unlikely to be brought into force immediately. It seems likely that there will a lead-in time, possibly with formal consultations before any changes are made into law. We would also expect there to be some reliefs available for those who have paid SDLT under the existing system, rather than everyone being immediately subject to any new replacement system. 

Generally, our view is that it is unlikely to become less expensive to either purchase or hold property, particularly high value property, and those properties which are held for the longer term. 

What is our take on the proposals and what might raise revenue? 

The proposals are all quite interesting and, if we are being honest, quite challenging. 

The annual tax on properties above a certain value is likely to be very difficult to implement. The financial tax on the introduction of CGT on principal private residences above £1.5 million potentially acts retrospectively and is a disincentive for transactions. And lastly, the big one, the re-banding of council tax, which is arguably long overdue, is simply not easy to implement.  

So what might raise more revenue? The reality is SDLT receipts from residential transactions have been declining, and we would suggest this is because the top end rates of SDLT are now acting as a serious deterrent to people transacting. Tax has that effect.  

If the Chancellor is pondering what might make more money, we submit it would be wise to consider adjusting the top end rates downwards, because it will create more transactions in the market. 

Are clients pausing transactions until after the Budget? 

Not really. Most clients are aware that speculation is just that, speculation. And for many, the decision as to whether to transact now is dependent on personal and practical factors, rather than just tax changes.  Indeed, some deals are being agreed on the basis of a swift, pre Budget exchange and/or completion.   

That said, we are seeing a few buyers asking whether it is worth holding off, particularly if they are in the early stages of thinking about transacting. What's our advice? It really depends. If you are ready to go, and you have taken suitable tax advice, then don't delay unnecessarily. But if you are still weighing up options, it is reasonable to wait and see what happens in the Budget in November. 

What would you do if you were buying property now? 

Press ahead and try and get things done before the Budget. There is a strong chance that property taxes will increase. The Government needs to raise more tax revenue immediately, and we think they may look at property to do so. As a result, we think the best tax environment to exchange and ideally complete is now, rather than post-Budget. 

So, for those people who are in the market, or are looking to the market, you have got about two months to get things done. That is ample time, but the time to act is now.  

The debrief 

Ultimately, there is no one-size-fits-all answer, and there are further solutions available, such as exploring the use of option agreements and nominees. Each buyer and seller will need to weigh delaying against the possibility of new property tax burdens after 26 November. Those considering transactions should seek advice early, assess their options carefully, and remain ready to act swiftly once the Budget is announced. 

We are always happy to discuss the conveyancing process and how to manage a transaction. 

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, October 2025