Autumn Budget 2025 – Housing Market Implications

Autumn Budget 2025: What the Latest Announcements Mean for the Housing Market

Chancellor Rachel Reeves has delivered the Autumn Budget, outlining several policy changes that will shape the residential property sector over the coming years. While rumours of stamp duty reform proved unfounded, the Budget confirms the introduction of a new levy for higher-value homes. Landlords will also see an additional 2% income tax applied to rental earnings, further tightening conditions for investment led purchases.

Mansion Tax Introduced for Homes Above £2 Million

Effective from April 2028, properties valued above £2 million will be subject to an annual mansion tax, payable by the owner. Homes in the £2 million – £5 million bracket will face a £2,500 annual charge, rising to £7,500 for properties above £5 million. This charge will sit on top of existing council tax liabilities.

Although this price bracket represents a very small portion of the wider market, less than 0.5% of agreed sales this year have exceeded £2 million—there are already signs of adjustment. Sales activity in the £2 million+ tier has fallen 13% year-on-year, reflecting the market’s response to months of speculation ahead of the announcement.

When Will the Mansion Tax Take Effect?
The new tax will come into force in April 2028 for all eligible properties.

What Does This Mean for Homeowners?
The annual charge will be based on a property’s valuation.