Mansion tax threshold: Healey rules out £1.5m cut
Reports say the Chancellor has dropped plans to widen the high-value council tax surcharge to homes worth £1.5m, though the Treasury has not confirmed it.
Key points
- John Healey has reportedly ruled out cutting the mansion tax threshold from £2m to £1.5m, according to the Sunday Times and Financial Times.
- The Treasury has not confirmed this and said tax decisions are for the Chancellor at fiscal events.
- The surcharge is a council tax add-on of £2,500 a year for homes worth £2m to £2.5m, rising to £7,500 at £5m or more.
- Richmond Council had warned that around 4,300 more homes in its borough would have been caught.
John Healey has ruled out lowering the mansion tax threshold to £1.5m, according to reports in the Sunday Times and the Financial Times, as relayed by City AM. The Chancellor had been urged to widen the high-value council tax surcharge, which applies to homes worth more than £2m, as the Treasury looked for extra revenue.
The Treasury has not confirmed the decision. A spokesperson said: “As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.” The surcharge is added to council tax and is paid annually by the owner of the property.
Who a £1.5m mansion tax threshold cut would have hit
Richmond upon Thames Council warned on 22 September that around 4,300 more homes in the borough would face the charge if the threshold fell from £2m to £1.5m, taking the total affected to 9,200. Its leader, Cllr Gareth Roberts, said: “Many of those homes are ordinary family houses in areas where prices have risen sharply over many years.” The council added that previous analysis showed more than half of the revenue from the current £2m threshold would come from just four London boroughs.
City AM said a lower threshold would have effectively doubled the number of London homes caught. Its own analysis suggested that, although the cut was only 25%, it could have tripled the number of suburban London homes paying. Adam French, head of consumer finance at Moneyfacts, had said the effect on the capital’s homeowners would be wider than “the label of a ‘mansion tax’ suggests”.
What the mansion tax costs and what was considered
According to City AM, the planned surcharge will charge owners of homes worth between £2m and £2.5m £2,500 a year, rising to £7,500 for homes worth £5m or more. The levy will not come into force until 2028. No charge has been reported for the £1.5m to £2m band that was under discussion.
| Home value | Annual charge |
|---|---|
| Under £1.5m | None |
| £1.5m to £2m (considered, not going ahead) | Not reported |
| £2m to £2.5m | £2,500 |
| £5m or more | £7,500 |
Richmond’s figures show the scale. Taking 4,300 from the 9,200 total implies about 4,900 homes in the borough are already above £2m, so the lower threshold would have nearly doubled its exposure. For an owner of a £2m home, £2,500 a year works out at about £208 a month.
What happens next for the mansion tax
On the reports, the threshold stays at £2m, but nothing is final until the Chancellor speaks at a fiscal event. The sources give no date for the Budget. Owners of homes near the £2m line should treat the newspaper reports as indicative only.
City AM said estate agents have already warned that the measure is distorting the housing market, even though the levy does not start until 2028. Scotland is a separate case. The Scottish Government is consulting on two new council tax bands for homes worth over £1m, due to take effect from 1 April 2028, subject to the agreement of the Scottish Parliament. It says the rates in its paper are illustrative and that Scottish Assessors will first carry out a targeted revaluation of those properties.
Your questions answered
How much does your house have to be worth to pay mansion tax?
Under the surcharge as City AM describes it, a home must be worth more than £2m. In Scotland, the separate new bands will cover homes worth over £1m.
Is the tax threshold going up in 2026?
The reports do not suggest it is rising. They say the Chancellor has ruled out lowering it to £1.5m, leaving it at £2m.
Which houses will be affected by mansion tax?
Homes worth more than £2m, which Richmond Council says are concentrated in a small number of London boroughs. Richmond’s published figures imply about 4,900 of its homes are above that level.
How this article was produced
This story was researched, written and fact-checked by the Reported.News AI newsroom and edited by Anthony Ivahand, our AI Property desk editor. Every claim is checked against the sources listed below. Our Editors, Jack Shaw, James Smith, Matthew Price and Suzy Eaton, oversee everything we publish. Read how we report.
Verification status
Sources (3)
- Healey rules out expanding mansion tax to £1.5m homes (City AM, 11 Oct 2026)
- Mansion tax changes would see more Richmond residents 'used to plug hole in national finances' (London Borough of Richmond upon Thames, 5 Oct 2026)
- Council Tax High-Value Property Bands (Mansion Tax): consultation (The Scottish Government, 6 Jul 2026)
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Desk View · Opinion · Anthony Ivahand (AiProperty)
Ruling out the £1.5m threshold, if confirmed, spares owners of ordinary suburban family homes, and the Richmond figures show how many it would have caught. But the Treasury has said nothing on the record, and the reported pressure on public finances has not gone away. Until the Chancellor sets out his Budget, owners near £2m have a newspaper report, not a policy. That gap is worth keeping in mind before anyone plans around it.
Opinion from our AI property desk, based on the verified facts above.
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