The Chancellor has now set out the Autumn Budget, confirming several major tax changes that will directly influence homeowners, landlords, and anyone involved in the housing market. After weeks of speculation and leaked proposals, the Government has finally clarified which measures will go ahead and how they will operate in the years ahead.
One of the most significant announcements is the introduction of a new charge often referred to as a “mansion tax”. From April 2028, owners of homes valued above £2 million will face an annual levy on top of their usual council tax bill. This marks one of the biggest structural changes to higher-end property taxation in recent years.
The surcharge begins at £2,500 per year for homes valued between £2 million and £2.5 million. The charge then rises gradually across tiers, reaching £7,500 a year for properties worth more than £5 million. Unlike council tax, which is usually paid by the occupier, this new tax will be the responsibility of the property owner.
Current data shows that homes in this price bracket make up a very small proportion of the UK housing market. Less than 0.5% of all agreed sales this year have involved properties priced beyond the £2 million mark, and only around 1% of homes currently for sale fall above that threshold. Even so, interest in these properties has already cooled, with sales for homes over £2 million falling by 13% compared with last year — suggesting that recent rumours may already be affecting buyer confidence.
Property specialists warn that while the tax is targeted at the highest-value homes, its effects may ripple through the wider market. According to market analyst Colleen Babcock, any new financial pressure at the top end can influence pricing and activity across other price brackets, making movement more difficult for households lower down the ladder. She also highlighted that the London and South East markets—where most £2 million-plus homes are located—could feel the greatest strain, especially as these regions are still adjusting to stamp duty changes introduced earlier this year.
The Government has confirmed that properties will be reassessed through a focused valuation exercise every five years to determine their correct tax band. This will ensure homes are placed in the appropriate surcharge category, but it may also raise concerns for owners whose property values edge close to the threshold.
Another major announcement affecting the sector is the decision to raise income tax on rental earnings for landlords. From April 2027, property income tax rates will be increased by 2%. This means landlords will pay 22%, 42% or 47%, depending on their tax band. The rise replaces the previously rumoured plan to charge National Insurance on rental income.
For landlords, this increase will reduce net rental profits and could influence how they manage their portfolios. Some may choose to raise rents to balance the additional costs, while others—particularly those with smaller or lower-yielding investments—may consider selling up. Market analysts warn that tougher taxation often results in fewer rental homes being available, ultimately limiting options for tenants.
Colleen Babcock stressed that while landlords are often seen as an easy target for new taxation, the reality is more complex. Many investors are already dealing with rising mortgage rates, higher maintenance costs, and stricter compliance rules. Additional tax pressure could discourage investment at a time when rental demand remains high across much of the country.
In contrast to previous expectations, there were no changes to stamp duty in this year’s Budget. Although industry speculation suggested that certain thresholds or rates might be adjusted, the Chancellor made no alterations. This will come as a relief to many buyers who feared further cost increases, but it also means the market continues operating under the same structure introduced in earlier reforms.
Looking ahead, many of the changes announced will not come into force for several years. The landlord income tax increase is set for April 2027, while the mansion tax won’t begin until April 2028. This delay gives homeowners, landlords, and potential buyers time to understand the implications and plan their next moves accordingly.
With the Budget now complete, the housing market can finally move forward with less uncertainty. The extended period of rumours and speculation has already influenced buyer and seller behaviour, particularly in higher-value areas. Now that the details are confirmed, households can make clearer decisions with better insight into future costs.
For anyone trying to assess their next steps—whether buying, selling, or renting—clarity is a welcome change. Those affected by the upcoming measures have several years to evaluate their financial position and adjust accordingly. Meanwhile, tools and resources available across the property sector can help homeowners understand valuations, borrowing power, and market conditions.
The Autumn Budget may not have reshaped the entire housing system, but its key tax changes will still have a notable impact over the coming years. How those changes unfold will depend heavily on market response and broader economic trends.
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