A newly introduced mansion tax is anticipated to have the most significant impact on affluent residences in London and the South East, as per a newly unveiled map illustrating potential nationwide repercussions.
Owners of properties valued at over £2 million are poised to face a surcharge starting at £2,500 from 2028, known as the “mansion tax.” This High Value Council Tax Surcharge, announced in Rachel Reeves’ budget, will be an additional charge on top of existing council tax. The Valuation Office will conduct a targeted evaluation to identify properties exceeding £2 million that will be subject to this new levy.
While the exact number and distribution of affected homes remain uncertain, an exclusive analysis of Land Registry data by the Reach Data Unit has disclosed all properties in England and Wales sold for more than £2 million in the past five years.
Since the beginning of 2020, over 26,500 homes have been purchased at or above the mansion tax threshold. A substantial majority, 67%, of properties surpassing the £2 million threshold since 2020 are situated in London.
Westminster leads with 3,832 homes sold for £2 million or more in the last five years, accounting for 14% of the total or one in every seven nationwide. Following closely, Kensington and Chelsea have seen 3,525 such transactions, representing approximately 13% of the total in England and Wales.
Camden follows with 1,482 homes (6%), trailed by Wandsworth with 1,412 (5%), Hammersmith and Fulham with 1,212 (5%), and Richmond upon Thames with 1,068 (4%). Outside the capital, Elmbridge in Surrey boasts the highest number of homes above the threshold at 939.
In regions beyond the Home Counties, Bournemouth, Christchurch, and Poole lead with 241 properties, while Cheshire East tops areas outside the South with 183.
The new system aims to enhance fairness in the Council Tax structure, as stated by the Treasury. Currently, the average band D across England stands at £2,280, exceeding by £250 annually the charge for a £10 million property in Mayfair based on the City of Westminster’s band H rate.
The surcharge will be categorized into five bands, with properties valued between £2 million to £2.5 million facing an annual fee of £2,500. Homes valued from £2.5 million to £3.5 million will incur £3,500 yearly, those between £3.5 million and £5 million will pay £5,000, and properties exceeding £5 million will be charged £7,500.
Starting from 2029-30, the surcharges will escalate in line with CPI inflation annually.
For swift access to valued news, opt for Daily Mirror as a ‘Preferred Source’ on Google News.