New Mansion Tax for Properties Above £2 Million

Autumn Budget 2025: What the Latest Measures Mean for the Housing Market

The Chancellor, Rachel Reeves, has announced the Autumn Budget, setting out several changes that will have an impact on the housing market over the coming years. Despite widespread speculation, there were no updates to stamp duty. Instead, the main focus is a new tax for higher value homes, along with an extra 2% income tax on rental income, something landlords will need to factor into future planning, particularly in areas where margins are already tight.

New Mansion Tax for Properties Above £2 Million

From April 2028, homes valued at more than £2 million will face an annual mansion tax, paid by the homeowner. Properties between £2 million and £5 million will be charged £2,500 per year, with the amount rising to £7,500 for homes above £5 million. This comes on top of existing council tax payments.

While only a very small number of properties fall into this price bracket, less than 0.5% of all agreed sales this year, there are early signs that the top end of the market has already slowed. Sales agreed above £2 million have dropped by 13% year-on-year, reflecting the uncertainty that has been building around these potential changes.

When Will the Tax Start?
The mansion tax will come into effect in April 2028.

What Does This Mean for Homeowners?
The amount due each year will depend on the property’s value.