Mortgage and Property advisers as well as IFAs have had their radar firmly switched on over the past weeks to all the purported measures that relate to property that the Chancellor was reported to be considering.
Whether it’s a Mansion tax, changes to SDLT or council tax, or support for first-time buyers, there has been plenty to consider. But now we know, especially as the OBR report was leaked early, giving everyone the chance to see budget measures before the Chancellor stood up.
So now we know and the number crunching can begin in earnest. In her Budget speech to parliament today, Chancellor Rachel Reeves has revealed the following changes, including a Mansion Tax.
You can check out all the budget analysis, news and views on all measures relevant to advisers here on our dedicated Autumn Budget category
Experts from across the mortgage and property sectors have been sharing their reaction to these budget measures with us as follows:
Reacting to the Chancellor’s decision to impose a property levy, Keri-ann Osfield, Chief Financial Officer at Multrees Investor Services, says:
“A mansion tax may secure short-term revenue, but it risks inflicting long-term damage on the UK’s financial ecosystem.
“If affluent clients begin reassessing their UK presence, the consequences won’t stop at property values: the departure of wealth also means fewer assets managed onshore, weaker flows into UK investment platforms, and growing pressures on the myriad advisers, asset managers, family offices, and tax firms. These are the foundation of Britain’s wealth management ecosystem – and their erosion risks dulling the UK’s edge as a global financial hub.
What’s needed now is long-term clarity, stable regulatory and tax frameworks, and sustained investment in the UK’s wealth management ecosystem – not a spate of ‘quick-fix’ wealth taxes that do more harm than good.”
Rob Hillock, Head of Personal Financial Planning at leading independent financial services consultancy Broadstone shares his reaction to the mansion tax saying:
“The Chancellor’s introduction of a ‘Mansion Tax’ on houses valued above £2 million will likely prompt many homeowners to get an up-to-date valuation of their property wealth.
It has the potential to create market distortions as homeowners look to reduce the value of their home to avoid additional tax or prompt some to downsize to smaller, cheaper homes. The OBR notes in its comments that the reform could see price bunching below each of the four new price bands as homeowners look to minimise their tax liability.”
Mark Hughes, Specialist Property Expert at Pure Property Finance:
“Reeves introducing a ‘mansion tax’ on properties over £2m, coming into play in April 2028, is extremely short-sighted. While this is aimed at higher-valued properties, it risks creating liquidity issues for owners who are asset-rich, but when it comes to cash, actually don’t have that much freedom, forcing sales and destabilising the upper end of the market.
This new rule could likely ripple down, impacting pricing and confidence across all property tiers. A fairer approach would’ve been preferred, one that stimulates growth not penalises ownership.”
Lee Murphy, Managing Director of The Accountancy Partnership, says:
“It was something that had been predicted for a while, but the announcement from Reeves that investment income will now be taxed more heavily than wages will mean that property investors will face a huge shift in landscape.
This change will increase the cost of holding and profiting from a property, and many landlords will need to review their portfolios and consider restructuring to remain tax-efficient.
It’s another clear signal that the government is prioritising earned income over passive returns, which is likely going to dampen investor appetite in the property market.”
Mark Hughes, Specialist Property Expert at Pure Property Finance:
“Reeves’ introduction of this new approach risks discouraging property investment, reducing rental supply and could potentially drive up huge costs for tenants.
Many landlords are already facing rising interest rates and compliance burdens, and this additional tax pressure could force them to leave the market.
Property investment underpins housing stability and long-term wealth creation, whereas penalisation undermines both. A balanced tax system should encourage growth, not push out those who’re going to provide homes and support the wider economy.”
Alex Ranahan, Tax Reporting Analyst at Financial Software Ltd (FSL) comments:
“Property investors have been hit hard over the last few years. Savings and investment income, including dividend and property income, will all be taxed at higher rates from April 2027 (the new dividend rates will take effect from April 2026). A new council tax surcharge on properties valued above £2 million will take effect from 2028-29. Combined with the increase in capital gains tax rates at the 2024 Autumn Budget, the diminution of the annual exempt amount by the previous government, and, outside tax matters, the policies in the Renters’ Rights Bill, this produces a significant set of disincentives to invest in property.
Adam Jennings, head of lettings at Chestertons, says:
“Increasing income tax for landlords could have dire consequences on the rental market. More landlords could decide to sell up, which will result in fewer available rental properties and leave more renters struggling to find a property within their budget.”
Sanjay Joshi, Director at Lawsons & Daughters, a London estate agent, said: “With so little in the Autumn Budget to stimulate the housing market, the uncertainty that’s been holding things back is likely to persist. Aside from the newly revealed council tax surcharge on £2m+ homes, there’s nothing here to boost confidence or give the market direction.
There’s plenty of headline noise, but not enough clarity to genuinely reassure the wider market – especially buyers and sellers at the lower end of the scale, where confidence has been most fragile.
Similarly, landlords remain unsettled too. Many are already planning to sell up, with new legislation coming in 2026, and the increase in tax rates on income from property will only fuel that sentiment.”
Joe Pepper, UK Chief Executive Officer, PEXA, said:
“The Budget has predicted that income from Stamp Duty would rise to £28 billion by 2030-31 thanks to ‘rising property transactions’. But the fact is, it is limiting these transactions because the cost of the tax is affecting affordability for would-be first time buyers who have had to raise a huge deposit and be subject to a considerable tax liability on completion. The government will not benefit from the tax income of those who do not or cannot enter the market due to affordability and to make matters worse, the availability of housing for this group is limited because the tax is putting people off climbing the ladder. They current fragmented transaction process also takes too long and is too uncertain to deliver the benefit claimed in the Budget – takes over 22 weeks from instruction to completion. This is costing the economy £1.5bn a year in lost transactions according to Santander, and costing the average consumer £1200.
The one upside of changes is that we can keep the industry on an even keel, buying time to digitise the back-end infrastructure that supports the transaction process, before any change to taxation sends demand skyrocketing. As it stands, it can’t support current buyer demand, let alone any further increases in activity future measures will spark. We need to start urgently investing at scale in the digitisation of the technology that supports conveyancers while we have the chance.”
Adam Bovingdon, Managing Director – Property Development at United Trust Bank (UTB), comments on the changes with reference to housebuilding and the property market.
“After a long wait and an early glimpse from the OBR, the 2026 Autumn Budget Statement is now behind us. Whilst it brought no major incentives for housebuilding, clarity is better than the uncertainty that has loomed over recent months. The so-called ‘mansion tax’ has grabbed headlines and would have created far less news without this emotive nickname. If it was called what it is, an increase in council tax for high-value homes representing less than 1% of households in the UK, most people would have dismissed it as largely irrelevant to the general public.
Hopes for a revised SME Help to Buy scheme and a stamp duty break for first-time buyers have faded, yet some form of stimulus would help to encourage the market and could be justified as an investment for growth.
Data from the Home Builders Federation (HBF) shows the previous Help to Buy scheme delivered strong returns. Many repaid loans generated about 9% uplift, early redemptions brought millions in interest, and the scheme is projected to return more than £2bn to the Exchequer. For a government focused on growth and committed to housebuilding, reintroducing a targeted Help to Buy initiative would be a welcome and logical step.”
Sarah Coles, head of personal finance, Hargreaves Lansdown:
“Property investment has always come with a painful tax bill. This announcement intensifies it.
Landlords pay tax on the way in, tax on the sale, and tax on any income along the way. The hike in the tax rates on rental income make things even worse. Property investors might have to reconsider whether the maths still adds up under these rules, or whether they should join the exodus from the sector.
The fact they can invest in stocks and shares completely free of tax in an ISA may persuade more of them there’s an easier return to be made elsewhere. For those who have been run ragged by the work involved in managing a property, it also enables them to make an income or gain that involves much less hard work.
The move will also be incredibly difficult for renters, who are already wrestling with runaway rents, and could see their monthly costs hiked yet again. The HL Savings & Resilience Barometer already shows they have less money left at the end of the month – at just £39 compared to £299 among mortgage holders. They also have less in savings and are less likely to be on track with their pension than homeowners. Higher rents would make this even worse.”
Colleen Babcock, Rightmove’s property expert, says: “The property market needs less taxation, not more, to encourage and enable movement. Today’s announcement of a Mansion Tax could lead to some distortion at the top end of the market, particularly as the implementation date draws closer. It may also have an impact across the rest of the market.
Even if some wealthier buyers are unfazed by an additional cost, we could see some fall-throughs as others in this price bracket reconsider the long-term implication of their purchase. Sellers of homes priced very close to the £2 million mark may need to ask for £1.99 million to avoid putting off potential buyers. And retired homeowners who benefitted from house price inflation may face the difficult decision of whether they can afford the annual upkeep of a £2 million home.
Importantly, while this likely very complex tax aims to target the £2 million and £5 million price sectors, there is an inevitable trickle-down effect for the rest of the market. Even though our data shows that less than 0.5% of sales would be directly affected, a slower market can affect all types of movers, from first-time buyers to key workers and families.
While there will always be a market for the highest-priced, premium properties in the most popular locations, this tax would disproportionately affect London and the south of England markets, which are still recovering from April’s stamp duty increase. It’s a tax which is more stifling than supportive of movement and growth within the housing market.
Landlords might look like an easy target, but rental market taxation is usually detrimental to tenants looking to rent a home. The simple fact is that in order to provide tenants with much needed homes landlord investors need to be able to make the sums add up. Changes to mortgage interest relief, higher buy-to-let mortgage rates, the cost of compliance changes, and stamp duty increases have only made that harder. While UK Finance data suggests that despite challenges, more landlords are investing in new purchases and remortgaging than last year, today’s news will make it even harder for some landlords to make investments viable.”
Andrew Lloyd, Managing Director at Search Acumen (property data insight and technology provider), comments on the Autumn Budget regarding council tax surcharge and increased property income tax:
“This budget has felt like the most anticipated political move in years – a make or break for Starmer’s leadership. For industry, many have been hoping that economics would win out to politics, but the result has been a mixed bag. Whilst Reeves’ salami sliced Budget has seen a plethora of penny grabbing tactics, she has also underscored some solid commitments to technology, science and infrastructure that have given her some runway.
The Chancellor’s decision to add a surcharge to higher council tax bands signals a desire to redistribute regional mobility and bridge the wealth divide, rather than create transactional peaks and troughs like a Stamp Duty change would have likely had. Whilst this will be difficult to implement, the three years until it comes into effect will allow careful planning if managed correctly. A fully digitalised Land Registry will certainly aid this process and support the monumental task of revaluations of hundreds of thousands of homes. The concern is how valuations will take place and how legally binding they may be. If we see higher-value homes reduce in price over a sustained period of time between now and 2028, there is likely to be some pushback.
Tinkering with property taxes was always going to divisive, but now that the Chancellor has made her choice, the priority must be stability. No U-turns, no prolonged uncertainty: give homeowners the confidence to plan their lives.
For landlords, some will be hit twice in today’s Budget if stung by a council tax surcharge and an increase in property income tax. Some will have no choice but to exit the market entirely, reducing the supply of the already squeezed private rental sector. Rents have increased nationally by about 36% since 2020, a figure that sits well above wage growth and has tightened the screws on the cost-of-living crisis. What’s more, the scarcity of rental homes will add further pressure to social care and social housing supply, with the housebuilding sector currently in turmoil. Our research shows that the gap between social housing availability versus the ballooning volume of the non-working population is the largest since 2019, widening 173% in 2024. This means that non-working people, or those between 16 and 64 who are economically inactive and often most in need of social care, are outnumbering new affordable and social housing numbers 12 to 1. Taxing landlords to the extent that they are forced to increase rents or leave the market paints a concerning future for the UK’s rental population.”
Steve Cox, Chief Commercial Officer at buy-to-let lender, Fleet Mortgages, said:
Instead of the widely anticipated announcement of National Insurance being levied on landlords’ rental income, the Chancellor has instead decided to increase basic, higher and additional property income tax rates from April 2027. This means landlords will now pay 22%, 42% and 47% from that date, and this is anticipated to raise £0.5bn every year from 2028-29 onwards. It means landlords will once again see their incomes squeezed, at a time when costs continue to rise, and the introduction of the Renters’ Rights Act was already adding further costs to landlords next year, all of which are likely to be passed on to tenants in the form of higher rents.
Add in this income tax increase to all the extra costs and responsibilities, and again landlords are going to see their margins on properties under further pressure. It is far too early to say how this will impact supply within the PRS, but of course it will require a reassessment by landlords and we are likely to see rents being reviewed in order to maintain profits. I think we can be fairly certain that this decision will move landlords even further towards using corporate vehicles for their portfolios; our most recent Rental Barometer already showed 81% of all mortgage applications we received were from limited company borrowers, and the direction of travel now looks likely to move even further towards this.”
James Vernor-Miles, Partner and Head of the Residential Property team at Hunters Law, said:
“Between now and 2028, there will probably be a flurry of sales activity for properties that are presently valued at around the £1.5m to £2m mark. It is already a buyer’s market, so it will remain so for buyers in that price bracket for the next two-plus years.
“The market for properties currently valued just around the £2m threshold (and the next thresholds) will probably suffer uncertainty. We can foresee owners having to discount their asking prices to arrive at or near a lower threshold, and buyers lowering bids to compensate for future tax costs, until a threshold or an impasse is reached. This is a process known as the market ‘bunching’.
It seems very strange for the Chancellor to decide only to revalue four bands of the property market. £5m is a vast amount; but there have been plenty of recent property transactions at the £10, £20m £50m etc levels. If the aim is to spread the tax burden amongst those with the broadest shoulders, some might ask, why stop at £5m? Maybe, in the future, they won’t…
There are plenty of people, especially the elderly, living in homes with a “gross” value over £2m but who may be on low incomes, pensions, have mortgages, or equity release mortgages. A new levy payable out of income will hit these owners hardest. The Chancellor is going to consult on reliefs and exemptions that might apply.
Ingrid McCleave, a partner and tax specialist at city law firm DMH Stallard, said:
“There will be a consultation on ways of deferring the payment for those that are struggling, possibly on sale. It comes into effect in April 2028 and will be based on 2026 values.
The Valuation Office is going to be very busy identifying which properties will be caught by the new surcharge. Revaluations will be done every five years and will go up each year by the consumer price index. Trusts, companies, and partnerships are likely to be brought into the charge after consultation. This may have the effect of dampening house prices just below the four band thresholds of £2M, £2.5M, £3.5M and £5m.”
Richard Sexton, commercial director of proptech surveyor portal Houzecheck, said:
“Rachel Reeves could have done us all a favour by reducing stamp duty rates for first-time buyers and all residential purchases below £500,000. Lowering a transaction tax like this would have decreased upfront costs for buyers and stimulated demand, especially among younger first-time buyers. Evidence from past cuts shows sales volumes increasing within months.
She could have introduced a temporary stamp duty holiday for properties under £750,000 for the next 12 months. Historically, these boost market activity – just look at the impact this had in 2020 when buyers rushed to complete deals before the due date, and sellers listed more properties. A cut in stamp duty would have signalled government support for brokers, conveyancers and agents. The new Mansion Tax signals precisely the opposite.
As a proptech, we’d also like to have seen more focus on AI skills; while we’re one of the largest independently-owned valuation chains in England & Wales, we still need more people with machine learning skills to help speed up delivery of our reports and improve their quality even further.”
Matt Harrison, Customer Success Director at Finova Broker said:
“This is extremely disappointing for the property market. We were relying on this budget to stimulate transactions and growth, not dampen momentum even further. The Chancellor has failed to incentivise first-time buyers and other home movers. Instead, it hits landlords by raising property income tax. Considering ongoing regulatory changes already impacting the buy-to-let market, this will do nothing to encourage landlords to retain and grow their portfolios. The property market has been forgotten.
We need to bring an end to buyer hesitation. Instead, the Government has dictated how we save our money and provided no incentive or assistance to help individuals invest in property.”
Timothy Douglas, Head of Policy and Campaigns comments:
“Many property agents and consumers will be left scratching their heads that after months of speculation and the expectation of large-scale changes to Stamp Duty nothing has materialised. All this has caused is uncertainty and people to wait and see which is not helpful for market activity and ultimately economic growth.
A High Value Council Tax Surcharge will disproportionately hit certain parts of the country and impact property valuations going forward. Furthermore, placing further financial pressures on landlords through increasing additional rates of property income tax will put rents in the spotlight which will likely increase as costs are passed on to tenants.
Overall, with the UK Government’s ongoing target to build 1.5 million homes it is surprising that the UK Government’s Budget does not include a wide-ranging package of support for people to get onto or move up and down the property ladder. With an average deposit for first-time buyers currently sitting around £60,000, ultimately, this feels like a missed opportunity to support renters, home buyers and sellers and promote greater economic activity through the housing market.”
Ingrid McCleave, partner and tax specialist at city law firm DMH Stallard, said:
“Rental income is already charged on individual landlords at their marginal tax rate dependent on whether they are basic, higher or additional higher rate tax payers.
“The Chancellor has just increased their marginal tax rate in respect of property income by 2%. For most home owners that rent out a room to a lodger, it won’t have a great impact, provided the rent they receive is £7500 or below pa, since the tax free rent a room relief has not been affected.”
Danielle Soto, Managing Director for Savings and Business Finance at Aldermore, said: “While today’s Budget sets out important priorities, there is still more that can be done to help stimulate the housing market and unlock growth. Delivering more homes hinges on a simpler planning system and greater infrastructure investment, but the housebuilding sector, particularly SME developers, also needs certainty and targeted support to scale up delivery.
While the Government has repeatedly emphasised its ambition to build 300,000 homes a year, the data on completions shows this target remains out of reach. The absence of measures today to help move the market closer to that goal will be keenly felt. SME developers, who are disproportionately affected by red tape and planning complexity, still need a clearer pathway and long-term confidence to build at scale.
First-time buyers are also in urgent need of greater support. More than two-thirds (68%) say the Government and mortgage industry should introduce more creative incentives, and nearly seven in 10 (69%) favour the return of Help to Buy. A quarter (24%) want Stamp Duty relief or higher thresholds. We would have liked to see an 18-month Stamp Duty holiday for buyers of new homes under £500,000 – a measure that could stimulate sales, support first-time buyers and help smaller developers with cash flow.
We also hoped to see the reinstatement of Help to Buy, with a Government-backed 20% equity contribution for buyers putting down 5%. This would allow smaller builders to re-enter the market and accelerate housing delivery, particularly in regional areas where major developers are less active.
While there is no single solution, these measures together would provide meaningful support for SME housebuilders and first-time buyers alike.”
Jonathan Riley, Partner and Head of Private Client, at Fladgate commented:
“This will be a further disincentive to the private rental sector, on top of recent mortgage interest relief restrictions and the enhancement of tenants’ rights. Deciding to start a rental business now versus letting a property using a company would mean a difference of 25% corporation tax and potentially 47% income tax. This is significant and should be considered by those entering the market.
I expect lawyers will be asked whether valuations can be impacted by planning strategies. It is tempting to think of ways to do that, but before transferring the driveway to your children, you should wait for the consultation in 2026. This will provide important details and whether there will be specific anti-avoidance measures. The expected tax charges are at a level that many will take a view and simply pay the tax – of course, once the tax-collecting machinery is in place, it will be easy for a future chancellor to lower the value at which the tax applies and increase the tax payable.”