Autumn Budget 2025

Mansion Tax confirmed

The Chancellor revealed two additional property taxes for the housing market within her Autumn Budget statement. Stamp Duty remains unchanged.

Mansion Tax

Council tax charges in general remain unchanged, but the Chancellor has confirmed an annual council tax surcharge of £2,500 on properties worth over £2 million. This tax will be levied on owners and collected alongside council tax. It won’t come into effect until 2028.

Properties above the £2 million threshold will be placed into bands based on their property value (see below). Charges will increase in line with CPI inflation each year from 2029-30 onwards.

Threshold                         Rate

£2m – £2.5m                    £2,500

£2.5m – 3.5m                   £3,500

£3.5 – £5m                        £5,000

£5m plus                           £7,500

This new surcharge will be levied on fewer than the top 1% of properties.

The likely effect of this change is to prompt many homeowners to get an up-to-date valuation of their property. The tax could also act as an incentive for older homeowners to downsize before 2028.

Higher income tax for private landlords

A national insurance charge has been introduced on rental income.

The government has raised the basic rate of income tax for landlords by 2%.

From April 2027, the property basic rate will be 22%, the property higher rate will be 42% and the property additional rate will be 47%.

Response from the Office for Budget Responsibility

The average house price in the UK is expected to rise from £260,000 in 2024, to just under £305,000 in 2030.

House prices are expected to grow by just under 3% in 2025 and average 2.5% from 2026.

Property transactions are forecast to rise from just under 1.1m in 2024 to around 1.3m in 2029.