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‘Mansion Tax’ Plan Triggers Labour Haggling and Market Jitters Ahead of Budget

Key thresholds remain under negotiation before next week’s Budget.

Overview

  • Labour MPs, including London representatives, are pushing for a higher trigger of above £2 million, with reports suggesting a £2 million threshold would hit fewer than 150,000 homes versus roughly 275,000 at £1.5 million.
  • One option reported would revalue about 2.4 million Band F–H properties and levy a surcharge on roughly 300,000 of the most expensive homes, raising about £600 million with average extra bills near £2,000, while an alternative model would charge 1% annually on value above £2 million.
  • Rightmove says 17–20% of potential movers have paused plans due to property tax speculation, with 61% aware of possible changes and 79% of that group concerned, and asking prices falling 1.8% in November, the sharpest drop since 2012.
  • Hamptons estimates nearly a third of affected properties would be flats — about 100,000 — and that more than 90% of the impact would fall on London and the South East.
  • Reports indicate payment deferral until sale or death is being considered to protect cash‑poor owners, and Kensington & Chelsea has said it may double council tax on second homes as it deals with wider funding reforms.