With one in five London homes in the Royal Borough of Kensington & Chelsea valued at over £2 million, how will the new Mansion Tax impact the prime property market?
“After months of uncertainty, speculation and potentially bad news, the Chancellor finally delivered her budget. For many in the London prime property world, it turned out to be not as bad as it could have been. Everyone will have their views, and I too have mine, but what I am looking forward to is now being able to get on with business as normal. The (negative) anticipation of what could be, certainly stalled the market with many buyers and sellers taking the “we’ll wait and see” attitude. I for one am glad that it’s now done and dusted, and looking forward to moving on positively,” Laurence Lai, YOUhome Sales Director.
What is the new UK Mansion Tax? A new charge on UK homes worth over £2 million:
Annual fee £2,500 above current Council Tax
A new charge on UK homes worth over £5 million
Annual fee £7,500 above current Council Tax
Houses in Kensington, London
When will Mansion Tax be introduced? The new UK Mansion Tax on homes over £2 million will be introduced in April 2028. There will be a public consultation next year prior to launch (Source: OBR)
Who will undertake the property valuations? The goverment says the Valuatuons Office will undertake new property valuations on all homes over £2 million. It is homes in London and the South East that will be impacted most.
How many UK properties are affected? An estimate of 100,000 properties has been given by the government. Approx. 1 in 5 homes in the Royal Borough of Kensington & Chelsea are valued above £2 million. (Source: Zoopla)
Houses in Kensington, London
How much tax will the government generate? An estimate of £400 million per annum has been proposed by the government from 2029/30. However, it expects to loose revenue from market ‘price bunching’ below each band.
What is the new Income Tax on property income? Landlord’s property rental income will be subject to new taxes:
+2% on basic rate & +2% on higher rate
(awaiting further details)
We are available to answer your questions about home valuations and the market outlook for 2026. Call us now to discuss your next move.
,
Thursday 27 November 2025
