Key Points at a Glance
- A new “mansion tax” will apply to homes valued above £2 million from April 2028.
- Stamp Duty remains unchanged, despite speculation.
- Landlords will face an additional 2% income tax on rental income from 2027.
Chancellor Rachel Reeves has announced the Autumn Budget, introducing several property-related tax changes. Below is an overview of what these updates could mean for the housing market.
Mansion Tax Introduced for Homes Over £2 Million
From April 2028, properties worth more than £2 million will be subject to an annual surcharge, payable by the owner rather than the occupier and charged in addition to council tax.
Annual charges will be:
Property Value Annual Surcharge
£2.0–£2.5 million £2,500
£2.5–£3.5 million £3,500
£3.5–£5.0 million £5,000
£5+ million £7,500
The government plans a “targeted valuation exercise” every five years to confirm which band each property falls into.
Only a very small portion of the market currently sits above the £2 million threshold—less than 0.5% of all sales agreed this year—yet demand for properties at this level has already fallen 13% year-on-year, suggesting the market has been bracing for this announcement.
Landlords to Pay an Extra 2% Income Tax on Rental Income
From April 2027, income tax rates on rental income will rise by 2%, meaning landlords will pay:
- 22% (basic rate)
- 42% (higher rate)
- 47% (additional rate)
This increase replaces the previously rumoured introduction of National Insurance on rental income.
Impact on landlords:
- Reduced net rental returns
- Potential upward pressure on rents as landlords seek to offset costs
- Some smaller or lower-yield landlords may exit the market
Stamp Duty: No Changes Announced
Despite heavy speculation, the Budget introduced no changes to stamp duty. The current structure remains in place for all buyers.
When Will We See the Effects?
With the Budget now confirmed, buyers and sellers benefit from greater clarity. Speculation over recent months has already influenced activity—especially at the higher end of the market.
Since the major changes do not take effect until 2027 (landlord income tax) and 2028 (mansion tax), homeowners and investors have time to prepare and consider their next steps.
Whether you’re planning a move, curious about your property’s value, or exploring your borrowing options, we offer a range of tools and resources to help guide your decisions.