The word “mansion” usually conjures palatial entryways, swimming pools, cinema rooms and gardens you could fit a helipad in.
Not according to Labour.
Since Rachel Reeves, the former chancellor, announced at her final Budget in November that a high value council tax surcharge – known as the “mansion tax” – would apply to homes worth more than £2m, homeowners have been worried that the Treasury, keen to fill the black hole in its books, would reduce the threshold.
John Healey, the new Chancellor, is reportedly weighing up doing exactly that at the upcoming Budget in October. Reports suggest the threshold could fall from £2m to £1.5m.
Under current plans, from April 2028, homes worth more than £2m will pay an extra £2,500 a year, with properties worth £2.5m to £3.5m hit with a £3,500 fee, rising to £5,000 for homes valued between £3.5m and £5m. The upper threshold is a £7,500 charge for houses worth more than £5m.
Reducing the threshold from £2m to £1.5m would draw an estimated additional 130,000 homes into the tax – many of which would not qualify as a “mansion” by any metric.
James Nightingall, of property search service HomeFinder AI, said: “If the threshold falls to £1.5m, calling this a mansion tax becomes difficult to justify. In parts of London, that buys a flat.”
Here, Telegraph Money looks at the normal family homes which could be hit by the lower threshold.
