Chancellor John Healey will deliver his first Budget in just over three weeks, with property taxes, housing support and help for first-time buyers all thought to be in play.
But he faces a difficult balancing act between delivering Burnham’s agenda and finding the money to pay for them, while sticking to the strict fiscal rules he inherited from former chancellor Rachel Reeves. These require day-to-day spending to be covered by tax revenue and debt to be falling as a share of the economy.
The picture has become more difficult amid warnings that the Chancellor’s fiscal headroom could fall from the forecasted £23.6bn to roughly £14bn following a surge in the cost of government borrowing, triggered by the US-Iran war.
Here are some of the policies that could be on the table that would impact homeowners, renters and landlords.
For homeowners
The mansion tax – officially the high value council tax surcharge – was announced by Reeves at last year’s Budget.
From April 2028, homes in England worth more than £2m will pay between £2,500 and £7,500 a year.
However, The Times reported last month that Healey is considering lowering the threshold to £1.5m, with two Government sources describing it as a “live discussion” in the Treasury.
Lowering the threshold would lift the number of homes forecast to pay from 134,000 to 271,000 on current values, The i Paper reported. Around half would be in London.
All but one of the 20 constituencies that would be most affected are in London, according to the estate agent Hamptons, and 15 of them are held by Labour.
The move has sparked backlash from many in the capital, with four London councils – Wandsworth, Kensington and Chelsea, Westminster and Richmond – having written to Healey opposing the tax.
“It is simply wrong to assume that everyone living in these homes is wealthy,” they said.
One thing that is unlikely to be changing for homeowners, however, is stamp duty and council tax.
Pressure has been growing on Burnham from a group of Labour MPs – mainly based in the north of England – to replace the two levies with an annual property tax based on the home’s value.
Jonathan Brash, the MP for Hartlepool, described council tax as an “injustice built into a system that has not properly updated its valuations for 35 years”.
However, Burnham has previously ruled out changing stamp duty and council tax at the Budget, telling journalists in July that “that won’t be happening”.
For landlords
Landlords who sell a rental property at a profit pay capital gains tax (CGT) on the gain.
Gains on residential property are taxed at 18 per cent for basic-rate taxpayers and 24 per cent for higher and additional-rate taxpayers, after a tax-free allowance of £3,000 this year.
However, some Labour backbenchers are pushing to change these rates. Brian Leishman, the MP for Alloa and Grangemouth, is among those urging the Government to “equalise capital gains tax to match income tax”.
That would mean landlords in the higher and additional-rate bands paying more on any profit from a sale, with the additional-rate band rising from 24 to 45 per cent.
However, not all Labour MPs agree. A backbencher who described themself as a “fiscal hawk” told The i Paper that the Government must “not be doing anything that spooks the market and leads to higher borrowing costs”, naming CGT among the measures that could do so.
Higher costs are already coming for landlords, regardless of what the Budget brings.
From April 2027, income tax on rental profits will rise by two percentage points, taking the rates to 22, 42 and 47 per cent.
Income tax thresholds are also frozen until 2031. As rents and incomes rise, more landlords will be pulled into higher bands without any change in the rates, a process known as fiscal drag.
Some basic-rate landlords could therefore end up paying the 42 per cent rate on their rental profits.
New rules also came into force in April 2026 requiring landlords earning over £50,000 a year to keep digital records and give quarterly updates to HMRC, with the threshold due to fall to £30,000 in April 2027.
For renters
For renters hoping to buy, Burnham announced Your First Home in late September, for first-time buyers in England purchasing new-build properties.
Buyers would need a 2.5 per cent deposit and a government-backed equity loan worth 20 per cent of the price, The Guardian reported. Details of the income and price caps have not yet been published.
On the average first-time buyer asking price of £225,199, according to Rightmove, the deposit would be £5,630 rather than the £11,260 required for a standard 5 per cent deposit.
The Government has said further details will follow at the Budget, with registration due to open by the end of 2026.
But an issue for low-income renters is local housing allowance (LHA), which caps the housing support paid to private renters on universal credit or housing benefit. This has been frozen since April 2024.
The Resolution Foundation said in a report in September that a low-income family renting a typical two-bedroom home in England faces an average shortfall of £158 a month.
It said the gap between rents and the allowance is set to hit a record high this October. The gap is widest in London, reaching £324 a month in Inner East London.
The think-tank wants the Government to relink the allowance to local rents, at a cost of £2bn a year by 2029-30.
There has not been any indication that the Chancellor is considering this, but it may be an option he could consider to help households with the cost of living.
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