A new interactive map shows which areas will be hit the hardest by the new ‘mansion tax’ on homes valued over £2million after the move was announced in Rachel Reeves’ Budget
The new mansion tax will hit wealthy homes in London and the South East the hardest – but a new map reveals that every part of the country could be affected.
Owners of properties valued at more than £2million are set to be hit with a surcharge of at least £2,500 from 2028 in a move dubbed the “mansion tax”.
The High Value Council Tax Surcharge, to use its official name, was announced in Rachel Reeves’ budget and will be charged on top of existing council tax. The Valuation Office will conduct a targeted valuation exercise to identify properties above £2million and therefore liable for the new charge.
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Which areas will pay most under the ‘mansion tax’?
The number and location of homes that will be impacted is therefore unknown at this stage, but exclusive analysis of Land Registry data by the Reach Data Unit has revealed every home in England and Wales that has sold for more than £2million in the last five years.
A total of more than 26,500 homes cost their new owners on or above the mansion tax threshold since the start of 2020.
More than two-thirds of homes are in London
More than two thirds of the homes above £2million (67%) threshold since 2020 have been in London.
Westminster has seen a total of 3,832 homes sold for £2million or more in the last five years. That works out as 14% of the total, or one in every seven across the country.
Kensington and Chelsea has had the next highest number with 3,525. That’s around one in every eight (13%) of the total in England and Wales.
Camden has the next highest number with 1,482 (6%), followed by Wandsworth with 1,412 (5%), Hammersmith and Fulham with 1,212 (5%), and Richmond upon Thames with 1,068 (4%).
Elmbridge in Surrey has the highest number outside of the capital with 939 homes.
Bournemouth, Christchurch and Poole tops the list of places outside of the Home Counties with 241, while Cheshire East is top outside of the South with 183.
Why has the government introduced the Mansion Tax?
The new system is designed to improve fairness to the Council Tax system, according to the Treasury.
Currently the average band D across England is £2,280. That’s £250 more per year, the Treasury says, than a £10 million property in Mayfair, based on the band H charge in the City of Westminster.
The new surcharge will be broken up into five bands. Homes valued at between £2million and £2.5million will pay £2,500 a year. Those valued between £2.5million and £3.5million will pay £3,500 a year. Homes worth between £3.5million and £5million will pay £5,000, and those over £5million will pay £7,500.
The surcharges will increase in line with CPI inflation each year from 2029-30 onwards.
Local authorities with the highest number of sales above £2million
- Westminster – 14%
- Kensington and Chelsea – 13%
- Camden – 6%
- Wandsworth – 5%
- Hammersmith and Fulham 5%
- Richmond upon Thames – 4%
- Elmbridge – 4%
- Barnet – 3%
- Islington – 2%
- Buckinghamshire – 2%
- Merton -2%
- Lambeth – 2%
- Haringey – 2%
- Southwark – 1%
- Windsor and Maidenhead – 1%
- Hounslow – 1%
- Ealing – 1%
- Brent – 1%
- Bournemouth, Christchurch and Poole – 1%
- St Albans – 1%