Around 160,000 additional homes could be brought into the government’s mansion tax if its threshold is reduced from £2m to £1.5m, according to analysis by Tax Policy Associates.
The tax think tank estimates the change would almost double the number of properties caught by the High Value Council Tax Surcharge, which is due to take effect from April 2028.
Prime Minister Andy Burnham is reportedly considering reducing the threshold from the £2m level announced in the November 2025 Budget, although no change has been confirmed.
Analysis by Tax Policy Associates founder Dan Neidle, updated on 19 September, models how such a change could affect homeowners and government revenues.
LONDON AND SOUTH EAST
Tax Policy Associates estimates 85% of the additional properties brought into the tax would be in London and the South East.
London alone accounts for 51% of newly-caught homes, although Surrey would have more affected properties than any individual London borough.
The modelling uses Land Registry transactions adjusted to April 2026 values and contains a number of limitations, with Tax Policy Associates stressing that the figures are estimates rather than individual property valuations.
TAX TAKE
Neidle’s analysis finds simply introducing a lower-priced £1.5m band would generate relatively modest additional revenue once valuation and administration costs are considered.
Tax Policy Associates therefore models a scenario in which homes worth £1.5m to £2m pay £2,500 annually, while charges on higher-value properties also increase.
Under that scenario, it estimates annual revenue after taxpayer responses and additional administration costs at around £800m, compared with the OBR’s £400m forecast for the existing policy.
However, Tax Policy Associates cautions that the modelling is speculative and describes its extrapolation as considerably more uncertain than the OBR’s existing costing.
