Spear’s quotes William Marriott and Hannah Catt on the implications of a ‘mansion tax’ for properties exceeding £2 million announced in the UK Autumn Budget
Rachel Reeves’ latest Budget unveiled plans for a ‘mansion tax’, officially termed the High Value Council Tax Surcharge, which will apply to properties valued at £2 million or more.
From 2028, homes in England worth over £2 million will be charged £2,500 a year, rising to £7,500 for properties valued above £5 million.
Reeves said the measure was designed to address uneven council tax bills, noting that some modest homes such as a band D home in Darlington currently pay more than multi-million-pound properties in Mayfair. The surcharge is expected to raise more than £400 million by 2031.
William Marriott, Partner and Head of the Private Property Group, comments on the new tax for Spears:
The announcement of the introduction of an annual charge of £2,500 for properties worth more than £2m and £7,500 for properties worth more than £5m (levied on owners and collected alongside council tax) will impact more than just the ultra-wealthy. Most obviously those with assets that have grown in value over the years. Given average property prices in London and the South East, this tax will hit a broad swathe of homeowners, including many planning to downsize or pass wealth to future generations. It will be interesting to assess the impact of the new tax (especially on values of homes at or near those thresholds) at a time when stability seems key.
"The additional annual charge will no doubt be in the minds of the buyers of property at or near the £2m and £5m thresholds. We expect to see appeals and argument over valuations but contractual matters will be difficult to assess until we have more detail.
Hannah Catt, Senior Associate in the Private Property team, adds:
This was good news, really. There has been talk about some sort of mansion tax since Labour got in government and this is about as good as we can get in my opinion.
"For HNWs and UHNWs, this tax is probably going to have very little effect on what they plan to do with their properties.
Read the full piece in Spears here and here.
