UK government considers lowering mansion tax threshold

The UK government is considering lowering the threshold for a new property tax, potentially expanding the levy to include homes valued at more than £1.5 million. Currently, the planned tax applies to properties worth over £2 million, with owners facing annual charges between £2,500 and £7,500 starting in April 2028.

If the threshold is reduced to £1.5 million, the number of affected properties could rise from approximately 123,000 to as many as 245,000 to 271,000. London is expected to be the most heavily impacted region; experts suggest that over half of the newly included homes would be located in the capital, with London homeowners potentially facing a total bill of £624 million.

Chancellor John Healey is expected to address these measures in his upcoming Budget on October 28. The government is seeking ways to stabilize its financial position and limit cuts to public spending amid rising energy prices and borrowing costs.