Fears are growing that Chancellor John Healey could widen the net of Labour's mansion tax in next month's Budget, putting as many as 243,000 homes at risk of being caught by the levy.
From April 2028, owners of properties worth more than £2 million will be hit with an annual charge, after the so-called mansion tax was unveiled at last year's Budget by then Chancellor Rachel Reeves. Property experts now warn Healey could broaden the tax's scope when he delivers the Budget on October 28.
Government officials have yet to publish details of a consultation launched earlier this year on how the tax will work, fuelling fears it could be released alongside an announcement expanding its reach. Tom Bill, head of residential research at estate agency Knight Frank, said there was "unfinished business" on the mansion tax. "The Government is leaving the door open to bringing more homes into the mansion tax net in the future," he said. "I fear there could be further announcements in the Budget. Andy Burnham seems really keen on rebalancing wealth across the country. We can expect more properties in the South-East to be targeted."
Threshold could fall to £1.5 million
James Quarmby, head of private wealth at legal firm Stephenson Harwood, said the recent consultation was "more of a political statement rather than asking for people's views" but could still be used to push through further changes. "I don't think the Government can afford to take it down to £1million as too many Labour voters would be affected, but £1.5million sounds about right, and we could hear it being announced in the Budget next month," he said.
Healey is reportedly considering fresh tax rises to plug a £14 billion black hole caused by the rising cost of government debt. The crisis has been fuelled by global uncertainty over oil prices linked to the US conflict with Iran, along with concerns that the Prime Minister is pledging to spend more without matching budget cuts. Among the ideas reportedly under discussion are lowering the mansion tax threshold from £2 million to £1.5 million and increasing surcharge rates, which currently range from £2,500 to £7,500 a year on top of council tax.
Inspectors checking for garages and views
HM Revenue & Customs' Valuation Office Agency has already begun trawling properties in council tax bands F, G and H to identify who could be hit by the charge, officially called the High Value Council Tax Surcharge, which is due from April 2028. Ministers have admitted valuation agents will be able to carry out internal inspections of homes to check whether they exceed £2 million. Anyone refusing a visit could face a fine of up to £200. Surveyors can look for scenic views, conservatories and large garages, and some readers say they would consider bricking up a view to lower their home's value.
The mansion tax is expected to raise about £430 million extra a year but could cost millions to run. The surcharge comes in four price bands, from £2,500 for homes worth more than £2 million to £7,500 for those above £5 million. Tax Policy Associates estimates 243,000 homes are worth £1.5 million or more, of which 127,000 exceed £2 million, with 85 per cent of those affected in London and the South-East.
Homeowners fear losing their houses
Mike Dunn, 82, a retired City trader, and his wife Jennifer, 80, bought a £740,000 two-bedroom flat in Mayfair, central London, in 2000 after selling their family home in Amersham, Buckinghamshire. "What irritates me most is calling the damn thing a mansion tax," Mike said. "We are not richer for having a home worth as much as £2million because we don't plan on selling it. This is a petty-minded tax targeting those that choose to live in London or the South-East."
Widow Anne Hubble, 84, bought a four-bedroom detached Edwardian home in Sidcup, Kent, with her late husband for £80,000 in 1981. Her husband, who ran a building company, died from Covid six years ago aged 85. "The house was a wreck when we bought it, with a leaking roof and extensive flood damage," she said. "Why should we be punished for working all our lives to build a family home we love?" Anne, who has blood cancer and three children, four grandchildren and two great-grandchildren, said she already pays about £3,600 a year in council tax and £380 a month to heat her home. Homeowners who cannot afford the tax upfront are expected to be allowed to defer payment until they sell.
'What are they going to do, throw me in jail?'
Patricia Kirk, 76, runs Brookgate Farm Cattery in East Sussex. She and her late husband Roger, a heating engineer who died in June 2026 aged 82, bought the six-acre farm for £65,000 in 1982 and lived in a caravan while renovating it. The couple took out £200,000 in equity release a decade ago to pay off an interest-only loan. "What are they going to do if I cannot pay, throw me in jail?" Patricia said. "They are squeezing us until the pips squeak and we will simply not be able to afford the extra bill." Committal to prison is only ever a last resort for council tax non-payment, and councils must show wilful refusal or culpable neglect before pursuing it.
Dennis R., 84, owns a two-bedroom artist studio in the South-East bought 50 years ago and now worth £1.5 million. "Why should I move at my age just because someone milks my only asset to fund a benefit lifestyle for those that choose never to work?" he said. "It is nothing short of legalised theft and gerrymandering on a vast scale."
'This is all about politics'
Tom Bill said the £430 million the tax is expected to raise amounts to a "rounding error" compared with overall government tax revenue. Quarmby agreed: "This is all about politics, as the cost of introducing it means it does not make economic sense."
A Government spokesman said: "This surcharge will apply to less than 1 per cent of properties in England."
