Labour weighs lowering mansion tax threshold to £1.5mln, Times reports
The High Value Council Tax Surcharge now starts at £2mln and takes effect from April 2028.
Published
Labour is considering lowering the threshold for its planned mansion tax to £1.5mln from £2mln, the Times reports.
The High Value Council Tax Surcharge, as the policy is formally known, currently applies to homes in England valued above £2mln, with annual charges of £2,500 to £7,500 depending on the band, according to the HomeOwners Alliance. It is due to take effect from April 2028. A government consultation on how the surcharge would work closed on 14 July 2026, and the Treasury is still considering the responses, the HomeOwners Alliance and ValuQ report.
Cutting the threshold to £1.5mln would substantially widen the tax's reach. Tax Policy Associates estimates the number of properties caught would nearly double, from about 127,000 to about 243,000. MoneyWeek, citing the Mail on Sunday, put the number of additional households drawn in at around 150,000, based on the same group's calculations. Tax Policy Associates also estimates that if £1.5mln properties were taxed at the lowest existing band, with other bands raised, net revenue could climb to near £800mln, well above the Office for Budget Responsibility's certified estimate of £400mln after behavioural effects at the current £2mln threshold. Reports of a lower threshold had already been circulating since early September but remained unconfirmed by the government, ValuQ notes.
A cut to £1.5mln would broaden the tax base and raise more revenue than the current design, but it remains a policy under consideration rather than law. Labour's attention is on nearer-term political tests, including the Holborn and St Pancras by-election, and the execution risk on any wealth tax change, along with its timing, remains high.