Chancellor Rachel Reeves has delivered the Autumn Budget, introducing several property-related measures that will influence the housing market over the coming years. For many homeowners in Berkshire and the wider South East, the key takeaway is clarity something the market has been waiting on for months.
Below, we break down the main changes and what they could mean for you.
A New Annual “Mansion Tax” for Homes Over £2 Million
From April 2028, properties valued above £2 million will incur an annual surcharge on top of council tax. The charge will be paid by the property owner, not the occupier.
The surcharge will apply across four bands:
| Property Value | Annual Charge |
|---|---|
| £2.0–2.5 million | £2,500 |
| £2.5–3.5 million | £3,500 |
| £3.5–5.0 million | £5,000 |
| £5 million+ | £7,500 |
To determine which band applies, the government will conduct a valuation exercise every five years.
While this new tax will only directly affect a small percentage of properties nationwide, it is likely to impact markets where values naturally trend higher, such as London, the Home Counties, and parts of Berkshire. Over recent months, sales of £2m+ homes have already slowed, suggesting the market has been bracing for this announcement.
For homeowners at this end of the market, clarity around timing may encourage decisions to be made sooner rather than later, particularly if downsizing or relocating has already been under consideration.
Rental Income Tax to Increase by 2%
From April 2027, landlords will face a 2% increase in income tax on rental income. New rates will be:
- Basic rate: 22%
- Higher rate: 42%
- Additional rate: 47%
Rather than introducing National Insurance contributions as had been rumoured, the government has opted to increase property income tax directly.
For landlords, this will reduce net returns, particularly in smaller portfolios or low-yield areas. Some may increase rents to offset the change, while others may re-evaluate whether to hold or sell properties. When combined with existing measures such as reduced mortgage interest relief and higher acquisition costs, the environment becomes increasingly challenging for investment-led ownership.
Stamp Duty Remains Unchanged
Despite months of industry speculation, no stamp duty changes were announced. While some sectors may have hoped for reform to stimulate activity, the absence of change provides certainty, which often leads to healthier transaction momentum.
What Happens Next?
The implementation timelines, 2027 for landlord taxes, 2028 for the mansion tax are important. They provide a buffer for homeowners and investors to make considered decisions, rather than reacting under pressure.
In the short term, the certainty these policies provide may actually support more movement, particularly among homeowners who had been waiting to see if rumours became reality.
Over the longer term:
- Owners of high-value homes may bring forward plans to sell or downsize
- Some demand may shift away from central London and towards commuter counties such as Berkshire
- Domestic buyers using mortgages may face slightly tighter lending assessments due to increased annual ownership costs
At the very top of the market, these measures are unlikely to fundamentally change demand or supply. However, the impact will be more noticeable in second-home markets and among owners who are already juggling multiple taxation layers.
If you’re considering selling your property and would like expert guidance tailored to your home, we’d be delighted to give you a free market appraisal. Contact your local managing partner and we will set up a time to chat. We’d be delighted to hear from you.
