Reeves’ Mansion Tax is set to lose the Treasury at least £400 million before it comes into effect in April 2028. Experts are casting doubt on those optimistic figures…
The tax means that homeowners will be forced to pay a flat surcharge in addition to council tax if their property is valued at £2 million or more. The charge is set in four increasing bands…
Guido’s FOI Unit has obtained the internal breakdown HMRC used to cost the High Value Council Tax Surcharge’s impact on other tax receipts. The figures show HMRC expects the surcharge to reduce SDLT receipts by just £45 million in 2026-27, rising to £90 million by 2028-29, with CGT losses of £15-£50 million over the same period. And negligible IHT impact initially…
That adds up to £335 million in lost tax receipts plus £120 million in implementation costs. Homes sold for £2 million or more generate approximately 22% of all residential SDLT receipts. The Treasury expects only 90 fewer £2 million-plus sales per year, a 1.5% reduction in a market of roughly 6,000 annual transactions…
Hamptons research shows listings between £1.8 million and £2 million rose 6% year-on-year in the two months after the Budget, while listings between £2 million and £2.2 million fell by 7%. The bunching effect already in place two years before the surcharge kicks in…
Tom Bill, head of UK residential research at Knight Frank, casts doubt on the government’s projections and tells Guido:
“The main problem with an estimate like this is the assumption that transactions would have continued unimpeded without a mansion tax. Prices will distort and demand will soften around the price thresholds that some feared would be set higher, but the overall tax burden is the bigger problem. The lack of a viable replacement tax status for non doms and escalating levels of stamp duty will have a more profound impact on tax receipts in future years.”
Bill adds that rival policies and the expectation of the tax’s repeal in the next government will also freeze the market:
“The political direction of travel is also important as speculation itself has been one of the biggest disincentives for buyers and sellers in recent years. The prospect of lowering or scrapping stamp duty could have a greater impact, which politicians would need to address so the market doesn’t freeze.”
Lucian Cook, Head of UK Research at Savills, tells Guido that valuation and administration will be a huge cost:
“The biggest challenges for government will be the contentious process of valuation and the wider administration of the tax – that is likely to be relatively expensive in relation to the sums it raises.”
All of this is to raise £930 million in 2031 by the government’s optimistic figures. This will not go well…
Speaking to Adam Boulton on Times Radio about kicking the Golders Green suspect, Heidi Alexander said:
“I thought that if I was in the shoes of that police officer, then if I’m honest, given the situation, and the fact that he had a backpack on his back, and they were worried about whether that might go off, I could, if I was a police officer, frankly, I could see myself having taken similar action.”
