London homeowners have been left angry at Rachel Reeves’ so-called ‘mansion tax’ which she unveiled in the Budget on Wednesday.
From April 2028, owners of properties in England valued at £2m and over in 2026 will be required to pay an annual high-value council tax surcharge on top of existing council tax.
The annual charge will be split into four separate bands, with the amount paid increasing depending on which band the property is in.
The lowest band covers properties valued between £2m and £2.5m, while the highest charge of £7,500 will fall on homes valued at £5m or more.
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It is predicted that the tax will raise about £400m a year by 2029-2030.
However, some of those who own houses in London – where the majority of properties affected by the tax will be located – have been left fuming at the measure.
Speaking to the Guardian, some residents in Richmond, where 6.4% of house sales have been £2m or more over the last five years, argue they are being disproportionately affected.
One resident told the publication the tax was “laughable,” saying their £2m five bedroom family home isn’t a “mansion, it’s a 1930s house.”
Meanwhile, a couple whose East Sheen home is on the market for £2m said: “It won’t help our case – it’s just more burden for buyers.”
The surcharge is part of Rachel Reeves’ promise to make those with the “broadest shoulders” pay their “fair share” of taxes.
In her budget on Wednesday, the chancellor announced taxes would rise by £26bn by 2029-30. Some of measures announced included a mileage-based tax for electric vehicles, income tax thresholds being frozen for an extra three years, an increase in tax for the gambling industry and a tourism tax that regional mayors can implement in cities.
Reeves also announced an increase to the national minimum wage and an end to the two-child benefit cap.