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last mo.

Treasury Admits Mansion Tax Will Cut High-Value Home Prices by About 2.5%

Most of the impact falls on London and the South East.

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Under the chancellor’s plan, the owners of homes worth between £2 million and £2.5 million will pay an extra £2,500 a year, rising to £7,500 a year for homes worth more than £5 million
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Overview

  • Ministers said the surcharge’s effects will be most pronounced around band thresholds, where sellers may price to avoid higher charges.
  • The council tax supplement applies to English properties valued above £2 million from April 2028, with annual bands ranging from £2,500 to £7,500.
  • Official forecasts expect roughly £400–£450 million a year in receipts once in place, with the Treasury saying fewer than 1% of homes are affected.
  • Analyses indicate heavy concentration in London and the South East, with nearly a quarter of affected homes in three boroughs, while councils such as Middlesbrough report only a single property above the threshold.
  • The government plans an early-2026 consultation on exemptions and deferrals as bishops warn about vicarages and experts flag likely avoidance tactics such as delaying improvements or subdividing homes.