New analysis reveals that nearly one-third of properties affected by Rachel Reeves’s proposed £600 million “mansion tax” are flats. Approximately 100,000 apartments are set to incur this new surcharge, primarily targeting homes in the upper three council tax brackets in England.
Understanding the Mansion Tax and Its Impact on Flats
The mansion tax will particularly impact two types of flats: modern apartments in newly constructed towers with luxurious amenities and larger three or four-bedroom units in converted older residences. This analysis has been provided by estate agency Hamptons.
Key Details of the Mansion Tax
- Estimated Properties Affected: Around 300,000 homes will face the new charge.
- Applicable Council Tax Bands: Properties in bands F, G, and H will be affected.
- Surcharge Activation Point: The additional charge is expected for properties selling for £1.5 million or more.
- Current Valuation Basis: The existing tax structure relies on property values from 1991.
Revaluation Plans and Implications
The UK government plans to revalue the 2.4 million homes within the highest three council tax categories. This revaluation process will ensure that the tax accurately reflects current market values.
Tom Bill, head of UK residential research at Knight Frank, commented that while the term “mansion tax” resonates with Labour backbenchers, many homes may not align with this definition in reality.
As the Chancellor prepares to unveil the tax proposal in the upcoming Budget, it’s crucial for homeowners in high-value properties to stay informed about these potentially significant changes in taxation policy.
