UK considers lowering mansion tax threshold: report
Extending the levy to include lower-value properties would more than double the number of homes caught
[LONDON] The UK’s Labour government is examining plans to expand a new property tax to include homes worth more than £1.5 million (US$2 million), according to The Times newspaper, citing unnamed government sources.
A tax on properties valued at more than £2 million has already been announced by the government, with owners facing an extra levy of between £2,500 and £7,500 a year.
However, extending the tax to include lower-value properties would more than double the number of homes caught to 271,000, The Times reported.
British Chancellor of the Exchequer John Healey will deliver the Budget in September, his first since taking over as the UK’s finance minister in July. He is under pressure to deliver as he looks for ways to stabilise the country’s increasingly precarious financial position.
Prime Minister Andy Burnham said earlier last week that the government’s upcoming Budget would be “challenging” as conflict in the Middle East pushes up energy prices and fuels a rise in borrowing costs.
Previous chancellor Rachel Reeves announced the property tax last year, and it is expected to raise about £400 million a year after it comes into force in April 2028.
Homeowners in London are expected to be among the main targets of the tax.
House prices in London mean even modestly sized family homes in certain neighbourhoods will be caught by the levy, with average house prices in the Kensington & Chelsea district reaching almost £1.25 million in September 2025, according to data compiled by the Office for National Statistics.
About 88 per cent of the roughly 153,000 homes that will be caught by the tax are in London, according to Hamptons. BLOOMBERG
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