The Government should reform stamp duty to help more people get on the property ladder, a committee of MPs has urged.
A consultation should be launched by the end of 2026 to examine potential alternatives, the Housing, Communities and Local Government Committee said.
The report recommended that stamp duty reform takes place alongside a reform of council tax.
Stamp duty applies in England and Northern Ireland.
The report said: “For decades, skyrocketing house prices, slow wage growth and unnecessary barriers in the market have contributed to a deterioration in the affordability of homeownership in England.”
The “nil rate” threshold for first-time buyers shrank back from £425,000 to £300,000 from April 2025, and for home movers the zero rate threshold halved from £250,000 to £125,000.
Home buyers rushed to complete deals in the run-up to the changes.
Higher house prices in locations such as London and the south east of England often mean that buyers face particularly high stamp duty costs, making the jump to get on the housing ladder harder.
The report said stamp duty “puts barriers in front of people seeking to buy a new home”, adding that it “reduces the affordability of homeownership, slows the property market, and ultimately damages the economy.
“While it is a valuable source of revenue for public finances, stamp duty land tax must not be maintained in its current form and needs to be reformed.”
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The committee said a consultation on alternatives to stamp duty should consider factors including revenue-raising power, impact on friction in the property market, progressiveness, and fairness.
It said potential options that could be considered could include a full replacement; a reduction in rates to stimulate sales; an overhaul of banding thresholds to tie more closely with local property prices; and an update to reliefs and exemptions.
The report also said it should be easier for councils to take control of empty properties in their local authorities.
This could be done by the Government clarifying councils’ existing powers, and providing new options to recover homes that are empty for the long term, it said.
The report said support from family or the “bank of mum and dad” is a major part of the current housing market for first-time buyers.
It said: “More should be done to ensure that everyone has a fair chance of buying a home if they want to, regardless of their family background.”
Committee chairwoman Florence Eshalomi said: “Rates of homeownership in England have declined over the last 20 years.
“For many people, and especially for those unable to draw upon the bank of mum and dad, the prospect of owning a home is little more than a pipe dream.
“No silver bullet exists but the Government can apply a range of supply and demand-side measures to help people get on the property ladder.
“Progress on delivering the 1.5 million new homes in this Parliament is vital.
“Councils should also be empowered to play a greater role in housebuilding and given additional powers to bring empty and under-occupied homes back into residential use.
“Reform of stamp duty is necessary but, especially given the public finance implications, this cannot be done in isolation or without a credible alternative in place.
“We urge the Ministry of Housing, Communities and Local Government and HM Treasury to consult on alternatives to stamp duty that can deliver long-term benefit and not a short-term fix which only distorts the housing market and exacerbates the affordability problem.”
The report also said annual homebuilding targets should be published for each remaining year of the Parliament, with updates every six months on what actions the Government has taken to increase homebuilding rates by private developers.
The committee also said it welcomed plans to replace the Lifetime Isa with a new product focused on supporting homeownership, but said the product should not include a static property price cap, which would make it “unusable” in some geographical locations.
The report said there are “no easy solutions” to the homeownership challenges but “increasing the supply of homes by stimulating housebuilding is a vitally important component, and the Government is right to prioritise it by working with builders, developers and especially local government bodies”.
A Treasury spokesperson said: “First-time buyers pay no stamp duty on homes worth up to £300,000 and can claim relief on purchases up to £500,000. We’re cutting weeks off the process of buying whilst saving first-time buyers £710 on average.”
Henry Jordan, group director of mortgages at Nationwide Building Society, said: “Any review should look across all property taxes, with the aim of creating a system that enables people to move home easily, is more progressive, encourages the more effective use of the housing stock and takes into account people’s ability to pay.”
