Mansion tax threshold: one in 10 London homes would have been caught at £1.5m
John Healey has reportedly rejected a cut in the mansion tax threshold from £2m to £1.5m. Yopa research suggests almost one in 10 London listings would have been caught at the lower level.
Key points
- John Healey has reportedly ruled out cutting the surcharge threshold from £2m to £1.5m, though the Treasury has not confirmed it
- Yopa found 9.4% of London listings, or 11,316 homes, would have been caught at £1.5m, against 5.8% at £2m
- The surcharge starts in April 2028 at £2,500 a year for homes worth £2m to £2.5m, rising to £7,500 at £5m or more
- The Budget on 28 October is the next test
Chancellor John Healey has reportedly ruled out lowering the mansion tax threshold for London homes from £2m to £1.5m, according to the Sunday Times and the Financial Times. The Treasury has not confirmed the decision. A spokesperson said 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 change would have widened the High Value Council Tax Surcharge, which was announced by then chancellor Rachel Reeves in the November 2025 Budget and takes effect in April 2028. The Treasury had reportedly considered the move as it looked for extra revenue to fund cost-of-living support.
How many London homes would have been caught
Estate agency Yopa analysed Rightmove listings on 6 October. It found that 11,848 of the 792,456 homes for sale in England, or 1.5%, have an asking price of £2m or more. At £1.5m the figure would have been 22,092 homes, or 2.8%, an increase of 10,244 properties.
London would have taken the biggest share. Of the homes listed at £2m or more, 6,963 are in the capital, which is 59% of the England total. At £1.5m the London count would have risen to 11,316, or 9.4% of the city’s listings, bringing a further 4,353 homes into scope.
The figures use asking prices, not formal valuations, so they do not show how many owners would actually have become liable.
| Area | Share of listings at £2m+ | Share at £1.5m+ |
|---|---|---|
| London | 5.8% | 9.4% |
| South East | 1.6% | 3.4% |
| South West | 0.8% | 1.7% |
| East of England | 0.6% | 1.4% |
| England | 1.5% | 2.8% |
Source: Yopa, using Rightmove listings on 6 October.
What the mansion tax rate means for owners
The surcharge is a flat annual charge, not a percentage of value. Mortgage Professional reports that homes worth £2m to £2.5m would pay £2,500 a year, rising to £7,500 for properties worth £5m or more. The levy falls on owners rather than occupiers.
A London owner whose home is worth £2.2m would therefore face £2,500 a year from April 2028. That is £25,000 over a decade at the current charge. An owner of a £1.6m home would have been drawn in under the lower threshold but now stays outside the charge. The sources do not say what the lower band would have cost.
The i Paper reports that a lower threshold would have increased the number of homes expected to pay from 134,000 to 271,000, based on current values, with around half in London. That is just over double. It says some Labour MPs warned it could hit “ordinary families” in the capital, and one London MP called it a “catastrophic electoral own goal”.
Yopa chief executive Verona Frankish said: “The concern has always been that £1.5m doesn’t necessarily buy you a mansion in London. In many parts of the capital, this is the price of a perfectly ordinary family home.”
London property tax changes: what happens next
The Budget is on 28 October, and the i Paper reports that the Institute for Fiscal Studies has warned Mr Healey may need to raise up to £35bn in taxes to cover spending pressures. Mortgage Professional notes that the surcharge structure “remains open to revision”. One Labour MP told the i Paper they were pleased property tax changes were “on the agenda” and suggested reform could still come.
The policy has opponents. Shadow chancellor Andrew Griffith has called a mansion tax “a tax on family homes”. Reform UK has pointed out that Labour’s 2024 manifesto did not include one.
For now, the existing £2m threshold and April 2028 start date stand. Anyone buying or selling near £2m should wait for the Budget before assuming the rules are settled.
Your questions answered
What is the annual mansion tax rate in the UK?
There is no percentage rate. Under the High Value Council Tax Surcharge, homes worth £2m to £2.5m would pay £2,500 a year, rising to £7,500 for homes worth £5m or more, from April 2028. The sources do not set out the bands in between.
Do homeowners in England pay property taxes?
Yes. The new surcharge is attached to council tax and would apply only to the most valuable homes in England. Property taxes also include the stamp duty surcharge that rose in 2024, which Mortgage Professional says has helped lift Treasury receipts.
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 (5)
- Chancellor backs down on mansion tax expansion as thousands of homeowners spared (Property Industry Eye, 13 Oct 2026)
- Mansion tax u-turn spares one in 10 London homes: Yopa (Mortgage Strategy, 12 Oct 2026)
- The tax rises that could come in the Budget - and how likely they are (The i Paper, 12 Oct 2026)
- One in 10 London homes spared as lower mansion tax threshold ruled out (Mortgage Professional, 13 Oct 2026)
- Mansion tax u-turn spares almost one in 10 London homes (The Negotiator, 13 Oct 2026)
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Desk View · Opinion · Anthony Ivahand (AiProperty)
Ruling out the lower threshold looks sensible on the evidence. At £1.5m, almost one in 10 London listings would have been caught, and Yopa argues that price often buys an ordinary family home in the capital. But the Treasury has not confirmed the decision, and the Chancellor still needs revenue. Owners near the line should treat this as a pause until 28 October, not a promise.
Opinion from our AI property desk, based on the verified facts above.
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