From 2028, a new high-value council tax supplement of £2,500–£7,500 per year will apply to properties over £2 million. Despite headlines, this is not a mansion tax, it is a fixed-band annual charge, not tied to changing property values, and entirely separate from SDLT. Its predictability offers owners greater confidence in long-term planning.

For landlords, the rise in property income tax from April 2027 adds another factor to consider in investment decision-making. Smaller, personally held portfolios may see reduced net yields, while professional and corporate landlords are largely unaffected. Prime Central London’s strong demand and competitive yields continue to underpin the market. With correct pricing and a strategic approach, opportunities remain compelling, and overall market disruption is expected to be minimal.

Expert Insights

Simon Garcia, Partner, comments:

“The budget announcement offers clarity, but it’s important to stress one key point: this is not a mansion tax. It’s a predictable, banded supplement that adds a manageable amount to annual holding costs, not a tax on property value or unrealised gains. The delayed implementation to 2028 and the likelihood of a 2029 general election mean the policy may ultimately be revisited. For now, stability has returned, even if long-term certainty remains limited.”

Penny Mosgrove, CEO, adds:

“The increased tax on property income is aimed squarely at the accidental landlord. Larger landlords with and institutional investors, typically operate through companies and are largely unaffected. We expect smaller landlords to either form partnerships or exit the market entirely, which will reduce supply and create stronger competition for tenants. Prime Central London remains highly resilient, and with strategic planning and professional management, landlords are well-positioned to continue benefiting from exceptional demand and strong rental yields.”

For expert guidance on how these changes may affect your property, contact Quintessentially Estates today. Our team is ready to provide tailored advice and help you make informed decisions with confidence.