See more This is Money on Google - save us as a Preferred SourceBy ANNE ASHWORTH Updated: 09:50 BST, 12 July 2026
Fears are growing over the impact on the property market of rumoured mansion tax changes, with tens of thousands of relatively modest homes in London and elsewhere drawn into the net if implemented.Property professionals say the changes could make it harder for homeowners to move up the housing ladder.The mansion tax, which will be payable as a yearly surcharge to council tax, is currently set to affect only homes valued at £2million or more.But it threatens to go from a wealth tax to a ‘terrace tax’ if incoming Prime Minister Andy Burnham lowers this to £1.5million before the tax is implemented in 2028.The Mail on Sunday revealed last week that a lower threshold is one of the tax reforms under consideration by Burnham’s administration. The rate of the tax could also be raised. Concerns: One estate agency boss warns that lowering the threshold to £1.5m will capture many Victorian terraced homesDominic Agace, head of estate agency Winkworth, said: ‘My concern is that Burnham may propose a threshold that extends beyond traditional “mansion” territory. 'In the Greater London area, this could capture many Victorian terraced family homes.‘Many families living in these homes are already contending with substantial mortgage costs and the lingering impact of recent inflationary pressures.’Lowering the threshold to £1.5million would double the number of homes affected from 127,000 to 243,000, according to estimates from the influential Tax Policy Associates think-tank.At present, 27,502 homes in the South-East excluding London are set to be hit by the mansion tax. But estate agency Hamptons says this could rise to 62,500 if the starting point is £1.5 million. The number in the East could rise from 9,221 to 23,769.Property professionals say that desire to avoid the tax would artificially limit demand to properties priced at just less than £1.5 million.
