More homes could be pulled into paying Labour’s mansion tax than previously thought, officials have revealed.
Rachel Reeves announced a mansion tax on homes in England worth more than £2m at her recent Budget.
The Chancellor said the move would help deal with “wealth inequality”, and is expected to raise £400m a year by the end of the decade.
However, the chief executive of the Government’s Valuation Office Agency (VOA) has said that all homes over £1.5m will be checked to see if their value has risen over the £2m.
Jonathan Russell told MPs on the Treasury select committee that “we’ll probably look at houses that have an indicative value of £1.5m to make sure we’re not missing anything”.
“We want to be very clear about how we’re doing the valuation. We want to make sure we’re doing it properly and robustly.”
Mansion Tax
The mammoth exercise to find homes in England liable for the mansion tax will examine somewhere between 150,000 and 200,000 properties, Russell told MPs.
The Treasury’s planned policy would see properties in England found to be worth more than £2m hit with an extra £2,500 annual charge on their council tax – rising to £7,500 for homes worth over £5m.
It will take place over the next couple of years, with the new “high-value council tax surcharge” set to come into force in April 2028.
The exercise is not expected to involve any intrusive visits to people’s homes. The VOA will instead use recent sales figures, number of rooms, aerial maps and other data.
However, property experts have warned that “desktop valuation” tends to see homes over-priced.
The HomeOwners Alliance has warned that the process was “going to be a nightmare”, suggesting it could see some homes under £2m over-valued and pulled into the mansion tax.
Experts have warned some homes could be over-valued (Photo: Yui Mok/PA Wire)Separately, the Scottish Government has announced its own mansion tax for those in homes worth over £1m north of the border.
The council tax revaluation will create a new Band I for properties over £1m, and a Band J for those valued above £2m.
Less than 1 per cent of Scottish households – up to 25,000 homes – are expected to be hit by the tax. It is also set to come into force in 2028.
Council tax
Residents in Wales are facing a much wider overhaul in council tax bands, which could see some people pay more for their property.
The Welsh Government plans to use the VOA to revalue all 1.48 million properties in 2028 in bid to create a “fairer” system.
The VOA is using a “automated valuation model” tool that looks at property sizes and sales figures.
Households in England face being hit with the maximum possible council tax rises this year, after ministers gave the green light to an above-inflation increase.
It means that the average council tax bill for a Band D property will increase by £114, from £2,280 to £2,394.
Tax campaigners have called for a shake-up of the “regressive” council tax system across the UK, since it has not kept up with house prices and sees those on the lowest incomes pay a larger proportion than the wealthiest.
Some families are struggling with annual council tax increases (Photo: Yau Ming Low/Getty)Stamp duty
Stamp duty land tax (SDLT) is paid when buying a home, with rates varying depending on the price of a property, and whether you’re a first-time buyer.
The rates remained unchanged at Reeves’ November Budget. However, stamp duty did increase for England and Northern Ireland in April 2025.
Prior to April 2025, first-time buyers did not pay stamp duty on homes valued up to £425,000. However, they now have to pay 5 per cent stamp duty on the value of the property between £300,001 and £500,000.
Rates are different in Wales, where buyers pay Land Transaction Tax (LTT). The Welsh Government has ruled out any increases ahead of this month’s Budget.
Buyers in Scotland pay the Land and Buildings Transaction Tax (LBTT). No changes to it were made at this week’s Scottish Government Budget.
Capital Gains Tax
Those who own a second home, such as buy-to-let landlords, may be liable to pay capital gains tax (CGT) when they sell their property.
CGT remained unchanged for second home owners in Reeves’ November Budget, despite speculation she could extend the tax to owners’ main residences.
The main CGT rates had been increased at Labour’s 2024 Budget. So it is currently charged at 18 per cent for basic-rate taxpayers, and 24 per cent for higher-rate taxpayers. You can make up to £3,000 before it is due.
Chancellor Rachel Reeves says the mansion tax will address wealth inequality (Photo: Isabel Infantes/Reuters)Can you protect yourself from mansion tax?
The VOA’s Russell told MPs that there would be a consultation on how homeowners will be able to appeal their valuation, and which kind of properties will be exempt from the new tax.
Barbara Farris – a 69-year-old pensioner who believes her home in Hertfordshire is worth around £2m – previously told The i Paper she may try to challenge a valuation if she is liable for the mansion tax.
Property experts have also warned the mansion tax will create “perverse” incentives for homeowners to reduce the value of their home to get under the £2m threshold.
The Government will also consult on a deferral mechanism, aimed at allowing cash-poor pensioners to delay paying it until their house is sold.
It could potentially see some older people selling up, or passing on a huge tax bill to their children when they die.
The Government could face pressure to U-turn on the plan if the complex revaluation exercise gets bogged down in appeals, experts warned.
“If decisions are challenged, it creates extra delays and costs for a proposal that is designed to raise what is effectively a rounding error in terms of tax revenue,” Tom Bill, of Knight Frank estate agents, told The i Paper.
“Even if it doesn’t lead to another government U-turn, I expect it will create some unwanted headlines for the Treasury.”
Your next read
square NEWSThe nine-minute Special Forces op that shows how UK would seize Putin’s tankers
square WORLD AnalysisPutin’s worst fears are exposed by the Iran crisis
square WORLD AnalysisBritain has foolishly threatened Putin – and looks more vulnerable than ever
square US POLITICS AnalysisHubristic Trump is facing the revenge of the finance guys
James Cleverly, the Shadow Housing Secretary, said the mansion tax was “expanding in scope to encompass more and more homes”.
“Before long, ordinary families will wake up to find their homes classed as ‘mansions’, and they have been slapped with a massive bill.”
A Treasury spokesperson said: “The £2m band is not changing. The Valuation Office will carry out a valuation to identify any homes whose value has increased above the threshold.”
Hence then, the article about how you could pay more tax on your home as 200 000 face re evaluation was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( How you could pay more tax on your home – as 200,000 face re-evaluation )
Also on site :
- Saks Global Secures $1.75 Billion of Committed Capital and Announces Return of Industry Veterans to Advance Transformation of Iconic Luxury Portfolio
- Another Weight Loss Surgery and a Wedding Bombshell: Spoilers From '1000-Lb Sisters' Season 8 Episode 2
- Trump-Iran latest: President threatens ‘very strong action’ if protesters are hanged after forced confessions