It is disappointing to note that, yet again, we are experiencing more feedback from clients concerned about possible tax rises in the budget of 2026.
This happened last year when, unfortunately, rumours started around June and weren’t confirmed until the budget in November 2025 to be false and unjustified. There had clearly been too much scaremongering in the run up to the budget.
It seems to be happening again although, thankfully, this time only a few weeks away from the budget being announced next month on the 28th October.
Whilst a study has been undertaken by the government into the possible impact of a mansion tax coming into place, this budget was considered for properties over £2 Million in value and would incrementally increase the taxation to people who lived in those houses by between £2500 – £7500 per annum, depending on the value of their homes.
There has been talk that maybe this threshold could be reduced from £2 Million to £1.5 Million. The reality of all of this is that nothing is likely to become law before, at the earliest, April 2028, since a financial bill would need to be passed in parliament and this would take a minimum of 6 months to do so.
It is also a question of how many properties would need to be valued to work out where they would fall within the thresholds and of course the simplest answer, if you are considering buying a house up to £1.5 Million now, is to make an offer of £1.495 Million so that your house does not fall into the potential category to be taxed.
From my experience I have found that most rumours rarely come true and the reality of any possible increase would be a couple of years away.
A more instant, and quicker, increase would come from rising the current rates of tax for council tax invoices, rather than a new threshold for a mansion tax.
The government certainly needs to raise money to close the deficit although there is also a choice to reduce their costs !!! Any option in the property world for property taxation could be some time away yet
If you’re hoping to buy a home in the near future, and fortunate enough to be able to buy at this price level, the reality is that, at worst, you might receive at the lower end of the price threshold, a surcharge of perhaps £200 per month. If this is likely to make the house unaffordable, then you should consider whether you want to proceed or not, but at £2 Million a lot of buyers will have a greater leeway on their financial budgets than purely £200 per month.
Rumours, speculation and ‘what ifs’ rarely help financial sense and often scaremongering leaves everybody feeling just a little empty and rarely does it come true!
We have some superb properties available at sensible prices, which have been, in many cases in the region, reappraised and reduced over recent times. It is, in my view, the perfect time to buy a very good value home at the higher price levels.
If you’re looking for some further advice, please do not hesitate to contact myself or my team on 0191 223 3500 or email rare@sandersonyoung.co.uk.
Duncan G. Young
Chairman
SANDERSON YOUNG