The proposed Mansion Tax, due to be introduced in April 2028, could affect a considerably larger part of the property market if the government lowers the threshold from £2 million to £1.5 million. This assessment comes from tax advisory firm Blick Rothenberg.
Property professionals have expressed concern that the additional Council Tax charge on higher-value homes could gradually expand its scope due to 'fiscal drag'. Mark Cunningham, a partner at Blick Rothenberg, stated that without automatic indexation for property value thresholds, more properties could become subject to the tax as house prices rise while thresholds remain static.
Under current proposals, properties will undergo revaluation every five years, with charges increasing annually in line with the Consumer Prices Index. However, the government has indicated that decisions on uprating value bands will be made with each revaluation, leaving future adjustments to subsequent administrations.
Further details on the Mansion Tax may be disclosed in Chancellor John Healey’s first Budget next week. Cunningham noted that establishing the infrastructure to identify and value higher-value properties would make it easier for future governments to adjust thresholds or rates.