Britain's Labour government is weighing plans to cut the mansion tax threshold from GBP 2 million to GBP 1.5 million, a move that would more than double the number of homes liable for the levy to about 271,000, the Times reported on Friday, citing two government sources.
Britain’s Labour government was considering lowering the threshold for its planned mansion tax from GBP 2 million to GBP 1.5 million, potentially bringing about 271,000 homes within the levy based on current property values.
The proposal remained under discussion at the Treasury, with the government weighing measures to raise additional tax revenue ahead of Chancellor John Healey’s first budget on 28 October.
The mansion tax was originally announced in last year’s Autumn Budget under former Chancellor Rachel Reeves. From April 2028, properties worth more than GBP 2 million are due to face an annual charge of GBP 2,500, while homes valued between GBP 2.5 million and GBP 3.5 million would pay GBP 3,500.
The charge would increase to GBP 5,000 for properties valued between GBP 3.5 million and GBP 5 million and would apply in addition to council tax.
A Treasury spokesperson said tax decisions would be announced by the Chancellor at fiscal events and declined to comment routinely on speculation or proposals.
The government was also reported to be considering other tax measures as Healey faced pressure to increase revenue to address higher borrowing costs and finance plans for expanded social care and defence spending.
Britain announced last year that the high-value council tax surcharge would begin in England in 2028, with annual charges of GBP 2,500 for properties worth more than GBP 2 million and GBP 7,500 for those exceeding GBP 5 million.
Critics of a lower mansion tax threshold have warned that it could affect the property market by encouraging homeowners to limit investment or maintenance to keep properties below the threshold. Property presenter Kirstie Allsopp said the measure could discourage homeowners from adding value to properties approaching GBP 1.5 million.
