Are you listing your property for lower before the mansion tax? Email us at money@telegraph.co.uk*.
Labour’s mansion tax has already started to “distort” Britain’s property market with data showing the number of homes sold at just below the £2m threshold has increased.
Sellers are agreeing on sales under £2m to entice buyers who want to avoid paying the incoming high value council tax surcharge, which is set to kick in at £2,500 per year on properties worth £2m or more.
The levy was announced last year by Rachel Reeves, the former chancellor, and is expected to come into effect from 2028.
According to the report by Tax Policy Associates, the number of completed sales at the £2m price point between December 2025 and July 2026, compared with the same eight-month period the previous year, dropped from 117 to 25.
Meanwhile, the number of sales for properties worth £1.99m – just below the mansion tax threshold – more than doubled, from nine to 21. This phenomenon is known as “bunching”.
Tax Policy Associates, a think tank, stated: “The tax creates an obvious incentive to claim your value is just below the chargeable thresholds.”
However, buyers have been warned that HMRC can still value a property at more than the £2m mark in its valuation work.
