Proposed Mansion Tax Could Trigger Further Decline in Prime London Property Market

Proposed Mansion Tax Could Deepen Decline in Prime Central London Property Values

In a recent article by the Evening Standard, property experts have raised the alarm over reports that Chancellor Rachel Reeves may introduce a new “mansion tax” on homes valued above £2 million in her forthcoming Autumn Budget. The suggested 1% annual charge would predominantly affect properties in London and the South East, where 80% of homes in this price category are located.

The tax would see owners of a £2.5 million property paying £5,000 annually, while those with a £3 million home could face £10,000 in additional yearly charges — costs experts argue would fall heavily on family homes rather than speculative assets.

Mark Pollack, co-founder of Aston Chase, commented: “Deferring the Autumn Budget to 26 November has already had a huge negative impact on the volume of sales of residential property in the last quarter of the year and an ill considered further attack on wealth will highly likely result in a significant downward realignment of property values which have already seen reductions of circa 20% become commonplace in PCL.”

His remarks echo the growing concern that the capital’s housing market — already softened by higher interest rates and existing taxes — may face further turbulence should the government pursue additional levies on high-value homes.

Other leading figures in the sector also criticised the proposal as unfairly targeting London homeowners. Peter Wetherell called it “nothing more than a London levy,” while Savills’ Lucian Cook warned of its administrative complexity and risk of unintended financial strain on families who are asset-rich but cash-poor.

To read the full article, visit Four out of five homes hit by a Labour mansion tax ‘would be in London and SE’ – Evening Standard.