Although the property sector was not a key focus of the Autumn Budget 2025, the fallout from the hotly debated “mansion tax” continues to ruffle feathers throughout the property market.
The introduction of the new “mansion tax” for those with properties worth more than £2 million is cause for major concern. This is essentially an unfair "privilege" tax for these homeowners, who will now have to pay an annual charge, for the home they already own. If the goal was to make winter feel even harsher, mission accomplished.
This is proven tenfold in Together’s immediate snapshot view of homeowners' reaction to the Budget and the new annual “mansion tax”, which will cost up to £7,500, taking effect from April 2028.
Together’s research finds:
- A fifth of the UK public (21%) don’t think it’s fair that people who own properties worth more than £2 million will now have to pay an extra new annual charge (referred to as a “mansion tax”)
- The term itself has proved to be a bit of a misnomer given older homeowners who bought years ago and live on modest pensions now have to worry the tax will hit them hard
- Indeed, Baby Boomers (those aged 61 to 79 years old) are particularly up in arms by the new tax with 21% finding it unfair
- Almost a quarter (23%) of those living in London and the South West of England are set to be hit the hardest by the unfair change - especially given the stark difference in regional property prices
- Those living in Bristol (27%), London (23%) and Plymouth (23%) are calling out the unfair “mansion tax” most strongly
Ryan Etchells, Chief Commercial Officer at Together commented: “The Baby Boomer generation - somewhat unfairly - tends to have a bad reputation due to buying homes in the 1970s–1990s when prices were low and disproportionately benefitting from house price inflation since then. However, with this new “mansion tax” in place; as our research proves; it’s crystal clear that they will be hit hardest.
“This means ‘empty nesters’ and people who bought their property decades ago simply as a family home, not as an investment, will now have to cough up thousands just to continue living in their own home. That’s utterly unfair and will penalise them - adding even more cost pressures. Asset-rich but cash-poor older homeowners could really struggle, as this “mansion tax” could be equivalent to an entire year’s state pension.
“The industry needs to prepare for the likelihood that the government won’t carry out any affordability checks. This means lenders will need to factor this additional cost into mortgage assessments for homes above the £2m threshold, of which there are many, especially in London and across the South of England.”
