Brits warned value of homes will go down £50k thanks to new Rachel Reeves tax | UK | News
The value of UK properties could drop by as much as £50,000 following Rachel Reeves’ latest move, experts have warned. Properties worth over £2 million in England will face an additional charge of at least £2,500 from 2028 in what is called the new ‘mansion tax’. The Treasury acknowledged that the value of affected properties could fall by 2.5%, leading to losses of around £50,000 on a £2 million home and £125,000 on a £5 million home.
Experts have warned that this new surcharge could backfire on the Government by leading to losses in stamp duty revenue. In fact, estate agent Savills said the Government could lose £75 million in revenue from stamp duty. Telegram reports. The warning came after a parliamentary question from shadow housing minister James Cleverly.
He had wisely previously criticized the new tax introduced by Rachel Reeves. He said: “Labour’s new family homes tax is an attack on aspirations.
“This penalizes people who work hard, save a lot and invest well, to provide welfare spending for people who don’t work at all. We have forced Labor to accept that this tax will also impact property prices, leave homeowners facing losses of tens of thousands of pounds in equity losses and increase the tax surcharge.”
Latest Government figures reveal tax revenues have risen by 23% this year to £18.2bn. Meanwhile, stamp duty paid on homes has risen by more than £2 million to £2.2 billion in 2024-25.
In response to Cleverly’s question, treasury secretary Dan Tomlinson said: “The policy cost of the surcharge assumes an average price impact of 2.5 per cent on affected properties, with larger impacts around band thresholds.”
Meanwhile, a Treasury spokesman said: “We are reforming property taxes so that a £10 million Westminster mansion pays no less than a typical family home in England. Less than 1% of properties are affected; this targets only the highest value homes, not ordinary families.”
Lawyer Dan Neidle, founder of Tax Policy Associates, told The Telegraph: “It’s fair to say this surcharge has been introduced for political reasons. It doesn’t add up very much, it takes two years to come in and they have to build the infrastructure to do it; 100,000 properties have no value of their own. The ratio of cost to revenue raised is very high.”
