Key Takeaways

• A new “mansion tax” will apply to homes valued above £2 million from April 2028.

• No changes to Stamp Duty, despite recent speculation.

• Landlords will pay an additional 2% income tax on rental income from 2027.

The Chancellor, Rachel Reeves, has now delivered the Autumn Budget, outlining several changes to property-related taxation. Below, I Am The Agent have summarised what these updates mean for homeowners, buyers, and landlords.

New ‘Mansion Tax’ for Properties Over £2 Million

From April 2028, properties valued above £2 million will be subject to an annual surcharge, payable in addition to council tax. Importantly, this tax will be paid by the owner, not the occupier.

Annual surcharge amounts:

Valuations will be assessed via a government-led “targeted valuation exercise” every five years to determine which band a property falls into.

While this tax affects less than 0.5% of the UK market directly, the knock-on effects could be far wider. The upper end of the market has already shown signs of slowdown, with sales of £2m+ homes down 13% year-on-year—likely due to anticipation of this very announcement. As with most changes at the top end, there tends to be a trickle-down effect that influences buyer confidence across the wider market.

London and the South East, where higher-value properties are more common, will feel the impact most. These areas are still absorbing the effects of the April stamp duty increase, so this additional annual charge may further dampen activity.

Income Tax on Rental Income to Increase by 2%

From April 2027, landlords will pay an additional 2% income tax on rental income. Rates will rise to:

• 22% (basic rate)

• 42% (higher rate)

• 47% (additional rate)

This comes after months of rumours that National Insurance would be applied to rental income, but the government has opted for a tax rate increase instead.

I Am the Agent feel measures like this tend to be felt most by tenants. Landlord margins have already tightened due to changes in mortgage interest relief, rising buy-to-let mortgage rates, compliance costs, and stamp duty surcharges. While some landlords have remained active, new investments will become less viable for many.

For some, the additional 2% may push them toward higher rents to compensate, while others particularly those with smaller portfolios or weaker yields may decide to exit the market altogether. Either outcome worsens rental supply, which is already strained.

Stamp Duty: No Changes Announced

Despite heavy speculation, there were no changes to stamp duty in this year’s Autumn Budget. This provides some much-needed stability, particularly for buyers who have been delaying decisions in anticipation of potential adjustments.

When Will the Budget’s Impacts Be Felt?

Some changes, including the landlord tax increase (2027) and the mansion tax (2028), won’t take effect for several years. This gives affected homeowners ample time to plan.

However, speculation alone has already shaped market behaviour this year. Now that the Budget is confirmed, I Am The Agent expect sellers and buyers alike to feel more confident in moving forward, and this should help stabilise activity going into next year.

Whether you're thinking about selling, renting out a property, reviewing your portfolio, or simply want an up-to-date valuation, I Am The Agent are here to help!