UK announces new tax on expensive homes from 2028
The UK has announced a new annual tax on the most expensive homes.
The surcharge will apply to residential properties worth more than two million pounds (A$4.1 million) and is expected to reach 400 million pounds in 2029-30, according to estimates from the country’s budget watchdog published on Wednesday ahead of the finance minister’s budget announcement.
The new tax will come into force in April 2028.
Fiscal watchdog the Office for Budget Responsibility said homeowners valued by the Valuation Office at more than two million pounds at 2026 prices would be liable for a recurring annual charge that would be on top of the existing local tax liability.
According to the changes, there will be four price local tax ranges; The surcharge will rise from £2,500 for a home valued in the lowest two million to £2.5 million band, to £7,500 for a property valued in the highest value band of five million or more.
The document stated that the values will be increased every year according to consumer price inflation.
British finance minister Rachel Reeves also said on Wednesday there would be changes to commercial property taxes, or business rates, to increase rates on high-value properties.
“I will impose permanently lower tax rates on more than 750,000 retail, hospitality and leisure properties – the lowest tax rates since 1991 – and will be paid through higher rates for properties valued at £500,000 or more, such as warehouses used by online giants,” Reeves said in his budget speech to parliament.
Britain’s major supermarket groups, including industry leader Tesco and number two player Sainsbury’s, had called on the government not to impose higher rates on high-value properties, arguing that the move would increase high food inflation.
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