Skip to content
Search

Latest Stories

Submit Guest Post

Reeves’ £600 million mansion tax to target high-value flats

Chancellor's planned £600m levy on high-value homes to affect 100,000 apartments, mainly in London

Reeves

The chancellor is expected to allow homeowners to defer payment until death or property sale, preventing asset-rich but cash-poor owners, particularly pensioners

Getty Images

Highlights

  • Around 100,000 flats among 300,000 properties facing new council tax surcharge.
  • Properties worth £1.5m or more in bands F, G and H to be affected.
  • Homeowners could face bills exceeding £6,000 annually, with average surcharge of £2,000.
Nearly one-third of homes expected to be affected by Chancellor Rachel Reeves's planned council tax surcharge will be flats, according to new analysis by estate agency Hamptons.

The £600 million levy, dubbed a "mansion tax" by Labour backbenchers, will target approximately 300,000 properties in the highest three council tax bands (F, G and H) across England. Of these, around 100,000 are apartments.

The affected flats include luxury apartments in modern tower blocks with amenities such as concierges and gyms, as well as three and four-bedroom properties in converted townhouses and older buildings.


London and South East bear the brunt

More than 90 per cent of properties likely to face the surcharge are located in London and the South East, with particular concentration in areas such as Kensington and Chelsea, Westminster and Camden.

Tom Bill, head of UK residential research at Knight Frank, told The Telegraph that the Treasury will be delighted that the term 'mansion tax' has caught on among Labour backbenchers, but it's unlikely to reflect the reality on the ground for many homes."

The surcharge is expected to apply to properties sold for £1.5 m or more. As part of the plan, the government will revalue 2.4 m homes currently in the highest three council tax bands, which are still based on 1991 property values.

Financial Impact on Homeowners

Owners of affected properties could face total council tax bills exceeding £6,000 per year, according to Hamptons, with the additional surcharge averaging approximately £2,000 annually.

David Fell, lead analyst at Hamptons, noted that "Where these flats were bought in the last decade, in many cases, these are homes that are no longer worth what their owners originally paid for them."

The chancellor is expected to allow homeowners to defer payment until death or property sale, preventing asset-rich but cash-poor owners, particularly pensioners, from being forced to sell. However, this deferral would effectively function as an additional inheritance tax liability on top of the existing 40 per cent death duty.

Shadow chancellor Mel Stride criticised the plan as "a class war against Middle England", stating it would punish "aspiration and hit hard-working people".

Add EasternEye As Your Trusted Source
preferred source on google news

More For You

AI startups

The UK government is using public procurement to help AI start-ups turn technology into real-world products

iStock

British AI start-ups are being offered a route into government: What is behind the £100m push

  • The UK has launched the first competitions under a £100 million Sovereign AI scheme.
  • Start-ups can develop AI tools for the NHS, defence, computing and cybersecurity.
  • The programme aims to help smaller firms win government contracts and scale globally.

The UK government is putting £100 million behind British AI start-ups, with a new scheme designed to use public-sector contracts as a stepping stone for companies trying to turn promising technology into commercially viable products.

According to GovUK report, the first competitions under the Sovereign AI R&D Procurement Scheme will focus on four areas: NHS productivity, AI computing efficiency, defence technology, and security testing for AI agents. The government says the programme is intended to help strategically important British AI companies develop in the UK and eventually compete in international markets.

Keep ReadingShow less