The UK’s new mansion tax is now forecast to have an effect on round 165,000 householders when it comes into pressure in April 2028, about 45,000 greater than early estimates urged.
The fiscal watchdog, the Workplace for Price range Duty (OBR), says the levy on properties value over £2 million may increase roughly £400 million in its first yr, rising to £435 million by 2030‑31.
Nonetheless, as many as 4 in 10 valuation appeals are anticipated to succeed, doubtlessly lowering the variety of houses in the end charged.
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What number of pays the mansion tax?
The surcharge will apply to houses in tiered bands above £2 million, with annual expenses starting from £2,500 as much as £7,500 relying on worth.
In response to the OBR’s projections:
- About 71,000 houses fall into the bottom affected band (£2m–£2.5m).
- Round 79,000 houses are valued between £2.5m and £5m.
- 15,000 houses are on the high finish, paying the best surcharge.
The entire tax yield is forecast at £400m in 2028‑29, growing to round £435m by 2030‑31.
Appeals and behavioural affect
The OBR expects roughly one in 5 householders topic to the tax to lodge an enchantment over their valuation.
As a result of the surcharge bands are slim and based mostly on revaluations, about 40% of these appeals are assumed more likely to succeed, doubtlessly lowering the efficient tax base.
The watchdog additionally flagged that behavioural responses, similar to householders promoting or pricing homes slightly below £2 million to keep away from the tax, may barely scale back the quantity in the end liable.
Regional patterns and coverage context
Houses in London and the South East are anticipated to make up a disproportionate share of these affected due to greater costs in these areas.
The levy is a part of a wider autumn funds bundle aimed toward reforming property taxation and funding broader fiscal targets; within the OBR’s projections it’s anticipated to generate vital income over the last decade.
