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…
Open the dictionary to find this as the definition of a non-denial…
Housing Secretary Steve Reed has repeatedly stressed on this morning’s media round that the government has ‘ruled out’ imposing a one-year rent freeze. Reed my lips: no rent freeze…
He told Sky News:
“Yeah, I ruled it out in Parliament just a couple of weeks ago… and the reason we’re doing that is the Scottish government tried it… It ended up with one of the biggest increases in rent people have ever seen, and a reduction in the number of homes that are available to rent.”
Which sounds reassuring, but it was also Steve Reed – then Defra Secretary – who was ambushed by Rachel Reeves’ disastrous changes to inheritance tax for farmers at her first Budget. The rent freeze briefing this week came from the Treasury. ‘Fool me once’…
Rachel Reeves has hinted at her plans for a one-year rent freeze in the Commons:
“This Government have already taken action to reduce the cost of living and to bear down on inflation with the changes around energy prices, around fuel duty, prescription charges and rail fares, and I will do everything in my power and use every lever we have to bear down on the cost of living, including for people in the private rented sector.”
No10 said in a briefing to journalists today: “We have no plans to implement this.” And Bridget Phillipson said a rent freeze “is not the approach we are taking”…
That means soft-left Labour MPs will find Reeves has given them very little to chew on. If you don’t deny the claims then the market will go bananas…
The Number 10 spokesman this afternoon:
“Our position on the Chancellor remains. The Prime Minister has full confidence in the Chancellor…”
Rumours are swirling that Starmer is considering dumping her after the locals. Now the “full confidence” kiss of death has been delivered. Might be time for Reeves to refresh that LinkedIn CV again…
Rachel Reeves – who is fighting to keep her job post-May elections – is now plotting a one-year rent freeze on private sector rented homes excluding new builds. Part of a “cost of living package” which will obviously only raise rents…
Labour has constantly said it would not impose rent controls, be they stabilisation or any kind of freeze:
- May 2024: Labour spokesman says: “While we do believe action needs to be taken to protect renters and rebalance power, rent controls are not Labour party policy as we remain mindful of the risk they could pose to the availability of rental properties and the harmful impacts any reduction in supply would have on renters.”
- May 2024: Reeves says: “Where that has happened, it’s not always delivered the results that people might want. I think that should be up to local areas to decide, there may be the case for that in some local areas, but as a blanket approach, I’m not convinced by that.”
- July 2024: Labour “has reassured investors that it will not enforce any form of rent controls.”
- August 2024: Now in government, Matthew Pennycook says: “The Government does not support the introduction of rent controls. We have made clear that we intend to use the Renters’ Rights Bill to provide tenants with greater protections against unreasonable within-tenancy rent increases.”
- May 2025: Minister Baroness Taylor says in the Lords: “We have considered rent regulation within the broader context of the private rented sector, and we do not believe that limiting rents in this way leads to positive outcomes.”
- January 2026: Pennycook says in the Commons: “We have, however, made it clear that the government do not support the introduction of rent controls, including rent stabilisation measures, for the reasons that we debated at some length during the passage of the bill.” Well-evidenced reasons…
- March 2026: Pennycook says in a Parliamentary answer: “The government has been clear it does not support the introduction of rent controls, including rent stabilisation measures. We believe they could make life more difficult for private renters, both in terms of incentivising landlords to increase rents routinely up to a cap where they might otherwise not have done, and in pushing many landlords out of the market.”
- April 2026: Pennycook goes into more detail: “The Government does not support the introduction of rent controls, which we believe could make life more difficult for renters. There is sufficient international evidence from countries such as Sweden and Germany, and from individual cities such as San Francisco, as well as the recent Scottish experience, to attest to the potential detrimental impacts of rent controls on tenants.”
Reeves has U-turned as the ‘soft-left’ backbenchers demand more intervention from the government. Play stupid games, win stupid prizes…
Bookmark this from Andy Burnham:
2029: “that’s when the next election will be.”
May 2027: “Absolutely not.”
“No election any time soon.”
“All of this speculation on an early election, I can knock that dead.”
