UK may introduce property tax on homes over £500,000? Rail fares may rise by 5.8% next year! Asylum applications exceed 110,000, setting a new record!
- TBA
- Aug 26
- 4 min read
Reeves considering new property tax on houses worth more than £500,000
According to multiple British media reports, UK Chancellor Rachel Reeves is considering a major tax reform: introducing a new tax on owner-occupied residential properties worth over £500,000. If the proposal is approved, the relevant measures could be introduced during the current parliamentary term.
Currently, anyone buying a property worth more than £125,000 must pay Stamp Duty. For first-time buyers, the threshold is £300,000; however, if the property price exceeds £500,000, the first-time buyer relief no longer applies, and they are taxed as regular buyers.
According to the proposal being studied by the Treasury, a “Proportional Property Tax” may be introduced in the future. This would mainly apply to owner-occupied properties sold for over £500,000. The tax would be based on the property’s value and uniformly collected by HMRC (His Majesty’s Revenue and Customs).
Important points to note:
This tax would not replace Stamp Duty on second homes;
It would be paid by the owner when the property is sold;
In the medium to long term, it may gradually replace Stamp Duty and potentially even Council Tax.
The Treasury believes that a nationwide, standardized property tax would provide a more stable source of income than the current Stamp Duty system. It is expected to generate a similar amount of revenue to current Stamp Duty (which brought in £1.16 billion last year).
For more on UK property Stamp Duty, click here: Stamp Duty increased! Second homes to pay an extra 5% surcharge — is there a way to save money?
Rail fares in England on path to rise by 5.8% next year on back of inflation data
Due to rising food prices and travel costs, the UK's inflation rate rose again in July to a higher-than-expected 3.8%, marking ten consecutive months above the Bank of England’s 2% target. This has intensified concerns that the Bank may delay further interest rate cuts.
According to the Office for National Statistics (ONS), airfares for outbound UK flights jumped 30% month-on-month due to the early start of the summer holidays. In addition, prices for food and non-alcoholic beverages were up 4.9% year-on-year in July.
Moreover, the Retail Price Index (RPI) for July, which influences the increase in next year’s rail fares, was 4.8%, 0.2 percentage points higher than expected. Typically, regulated rail fare increases are calculated by adding one percentage point to the July RPI — meaning rail fares may rise by 5.8% next year.
In March 2024, rail fares were increased by 4.6%, which was also one percentage point above the July 2023 RPI.
Nearly half of England’s rail fares are directly set by the government. Currently, the Department for Transport (DfT) has not confirmed how it will calculate the fare increases for regulated tickets in 2026. Regulated fares account for roughly half of all train journeys.
The Scottish and Welsh governments usually cap their fare increases at similar levels. Regulated fares include most commuter season tickets, off-peak returns on long-distance routes, and flexible urban rail tickets.
If fares do increase by 5.8%, the annual season ticket between Gloucester and Birmingham would rise by £312, to £5,696. The Woking to London annual season ticket would increase from £4,260 to £4,507, significantly impacting commuters.
Meanwhile, the National Institute of Economic and Social Research (NIESR) expects inflation to decline in the second half of the year, eventually falling back to the Bank of England’s 2% target by the end of 2026. The institute said a November interest rate cut remains likely, especially given signs of a weakening economy, such as rising unemployment and fewer job vacancies.
Chancellor Rachel Reeves responded to the latest data, saying:
“We have made progress in stabilizing public finances, but more must be done to reduce the cost of living. That’s why we’ve raised the minimum wage, extended the £3 bus fare cap, and expanded access to free school meals to over 500,000 children.”
Record 111,000 UK asylum applications in past year
According to newly released data from the UK Home Office, the country received over 111,000 asylum applications in the year ending June 2025 — a record high. This figure represents a 14% increase compared to the previous year and surpasses the previous peak of 103,000 applications in 2002.
Despite the surge in applications, the government has sped up case processing. As of now, there are still 71,000 applications awaiting an initial decision, involving 91,000 individuals. This backlog is roughly half of the peak seen in June 2023 (134,000 cases).
At the same time, government spending on asylum seekers, such as housing and support, has decreased. The annual cost related to asylum in the UK dropped to £4.76 billion, a 12% decrease year-on-year. In particular, hotel accommodation costs fell significantly, from £3 billion the previous year to £2.1 billion.
Nevertheless, 32,059 asylum seekers are still being housed in hotels — slightly more than when Labour came to power, but well below the peak of 56,000 under the Conservative government in September 2023. Earlier protests erupted over refugees being placed in four-star hotels in London’s Canary Wharf, sparking public backlash. For more on this, see: UK taxpayers outraged: Refugees stay in London 4-star hotels while over a million citizens wait for housing.
The Labour government has pledged to clear the asylum application backlog by 2029 and gradually end the use of hotels in favor of government-owned accommodation facilities. However, whether this target can be met depends largely on the rate of deportations for those who are not granted asylum.
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