{"id":5926,"date":"2025-11-28T13:03:19","date_gmt":"2025-11-28T13:03:19","guid":{"rendered":"https:\/\/second-home.uk\/?p=5926"},"modified":"2025-11-28T13:03:19","modified_gmt":"2025-11-28T13:03:19","slug":"autumn-budget-mansion-tax-unveiled-by-stealth","status":"publish","type":"post","link":"https:\/\/second-home.uk\/?p=5926","title":{"rendered":"Autumn Budget: Mansion Tax unveiled by stealth"},"content":{"rendered":"

The government has introduced a tax on properties worth over \u00a32 million, though it will come in the form of \u2018council tax surcharge\u2019.<\/p>\n

The surcharge will be \u00a32,500 for a property worth between \u00a32m to \u00a32.5m, eventually rising to \u00a37,500 for those worth more than \u00a35m.<\/p>\n

The change will take effect in April 2028 for properties in England, while the measure is expected to raise around \u00a32.1 billion annually.<\/p>\n

The four price bands:<\/p>\n\n\n\n\n\n\n\n
Threshold (\u00a3m)<\/td>\nAnnual Rate<\/td>\n<\/tr>\n
\u00a32m to \u00a32.5m<\/td>\n\u00a32,500<\/td>\n<\/tr>\n
\u00a32.5m to \u00a33.5m<\/td>\n\u00a33,500<\/td>\n<\/tr>\n
\u00a33.5m to \u00a35m<\/td>\n\u00a35,000<\/td>\n<\/tr>\n
\u00a35m+<\/td>\n\u00a37,500<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Property income taxes will rise by 2% from April 2027, to 22%, 42% and 47% for basic, higher and additional rate taxpayers respectively.<\/a><\/p>\n

Reaction<\/p>\n

Claire Van der Zant is CEO of Novus Strategy, the technology consultancy for the home buying and selling industry.<\/p>\n

She said: \u201cLandlords are the losers once again, alongside wealthy homeowners. Both have been hit with a higher tax burden and the subsequent impact on demand at all levels of the property market is now a known unknown.<\/p>\n

\u201cThe Mansion Tax won\u2019t come into force until 2028 but we can expect increased numbers of prime homes changing hands from now on, as owners in this bracket can find themselves property rich but cash poor.<\/p>\n

\u201cMeanwhile, landlords have faced an increasingly hostile environment for nearly a decade with the loss of mortgage interest relief, extra stamp duty on additional properties and a less favourable eviction regime under the Renters Rights Act.\u201d<\/p>\n

Mark Hughes, specialist property expert at Pure Property Finance, said: \u201cReeves introducing a \u2018mansion tax\u2019 on properties over \u00a32m, coming into play in April 2028, is extremely short-sighted.<\/p>\n

\u201cWhile this is aimed at higher-valued properties, it risks creating liquidity issues for owners who are asset-rich, but when it comes to cash, actually don\u2019t have that much freedom, forcing sales and destabilising the upper end of the market.<\/p>\n

\t <\/p>\n

\u201cThis new rule could likely ripple down, impacting pricing and confidence across all property tiers. A fairer approach would\u2019ve been preferred, one that stimulates growth not penalises ownership.\u201d<\/p>\n

Madeline Gowett, tax partner at Travers Smith, said: \u201cAnnouncing an annual charge on high\u2011value homes was widely expected, but without addressing the wider flaws in property taxation is a missed opportunity.<\/p>\n

\u201cCouncil tax based on 1991 valuation is inherently unfair, penalising those in modest homes while under\u2011taxing prime property. SDLT continues to distort the market, discouraging transactions and locking owners into unsuitable housing.<\/p>\n

\u201cWith property an obvious proxy for wealth, the new \u2018mansion tax\u2019 may tick the fairness box by supposedly targeting those with broadest shoulders, but it is far from perfect and without structural reform this Budget misses the chance to modernise a property tax system that is outdated, deficient, and overly complicated.<\/p>\n

\u201cAn opportunity to at least consult on options to reinvigorate the property market and restore confidence through considered tax reform has been passed over.\u201d<\/p>\n

Tom Bill, head of UK residential research at Knight Frank, said: \u201cUntil the revaluations take place, buyers and sellers face years of uncertainty, especially around the \u00a32 million threshold. Even once completed, new valuations can be challenged, which would prolong the limbo.<\/p>\n

\u201cThe policy may also raise less than expected, especially because it is deferrable. If opposition parties say they would scrap it, many homeowners will look at the opinion polls and wait it out. When you factor in the cost of carrying out the valuation and the potential lost stamp duty revenue from a stickier market, the sums raised could look like a rounding error for the Treasury.<\/p>\n

\u201cMore properties will inevitably get dragged into the mansion tax net, which means the proportion of terraced houses, flats and semi-detached homes will grow over the years, particularly in the capital. The term \u2018mansion tax\u2019 will increasingly feel like a misnomer.<\/p>\n

\u201cOverall, it feels like politics has trumped economics. One the one hand, the policy is designed to keep backbenchers happy and ensure the near-term survival of the chancellor and prime minister. On the other hand, it throws a spanner into the works of the housing market for not much money in return, which is important in the context of a Budget where spending is front-loaded. The UK already pays the highest percentage of property taxes among OECD countries.\u201d<\/p>\n

\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

The government has introduced a tax on properties worth over \u00a32 million, though it will come in the form of \u2018council tax surcharge\u2019. The surcharge will be \u00a32,500 for a property worth between \u00a32m to \u00a32.5m, eventually rising to \u00a37,500 for those worth more than \u00a35m. The change will take effect in April 2028 for […]<\/p>\n","protected":false},"author":1,"featured_media":5927,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-5926","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\nAutumn Budget: Mansion Tax unveiled by stealth - Second Home<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.propertywire.com\/news\/autumn-budget-mansion-tax-unveiled-by-stealth\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Autumn Budget: Mansion Tax unveiled by stealth - Second Home\" \/>\n<meta property=\"og:description\" content=\"The government has introduced a tax on properties worth over \u00a32 million, though it will come in the form of \u2018council tax surcharge\u2019. The surcharge will be \u00a32,500 for a property worth between \u00a32m to \u00a32.5m, eventually rising to \u00a37,500 for those worth more than \u00a35m. 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