By PrimeResi.
Chancellor Rachel Reeves delivered her much-anticipated Budget yesterday, in which she confirmed a new so-called ‘mansion tax’ as well as hiking rates on property income.
The Chancellor’s Budget delivered fewer shocks than many in the prime property sector had feared, with Camilla Dell, Managing Partner at Black Brick, describing the announcements as “fairly benign” for buyers and sellers in the prime and super-prime market.
The headline measure — a new annual Council Tax surcharge on homes valued above £2 million — proved significantly less severe than widely anticipated. Rather than the 1% annual charge on values above £2 million that had been mooted, the confirmed figures of £2,500 for properties above £2 million and £7,500 for those above £5 million represent a far more manageable outcome for high-value homeowners.
Camilla Dell noted that Black Brick had been on standby to begin renegotiating deals for clients currently under offer, had a more punishing levy been announced. With that scenario avoided, she confirmed the charges are unlikely to “drastically change the way prime and super-prime property is bought and sold, or have a significant impact on prime London property values.”
One area to watch, however, is the potential for a “bunching” effect around the new thresholds, as owners look to price or value properties just below the £2 million and £5 million bands. This is a dynamic Black Brick is monitoring closely on behalf of its clients.
Camilla also offered a longer-term note of caution: previous increases to Stamp Duty and ATED demonstrate that once a new levy is established, governments tend to raise rates over time — making this a consideration for prime property owners looking beyond the immediate market.
For now, the absence of changes to Stamp Duty or Capital Gains Tax means the prime central London market can move forward with greater confidence and clarity.
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