Chancellor Rachel Reeves is preparing to deliver a pivotal Budget this week, with new taxes aimed at the wealthiest in society taking centre stage. The announcement, scheduled for Wednesday, comes amidst intense speculation and an apology from a Labour minister for the pre-briefing of potential measures.
What to Expect from the Budget
The financial statement, set for Wednesday, 24 November 2025, is expected to introduce several new levies designed to balance the government's books. At the heart of these proposals is a so-called 'mansion tax' targeting high-value residential properties.
Rachel Reeves is anticipated to outline a new approach to taxing wealth, which also includes a dedicated profits tax for gambling firms and a separate levy on bank profits. These moves signal a significant shift in fiscal policy towards those with the broadest shoulders.
The Details of the Proposed Mansion Tax
The flagship mansion tax proposal is complex and has been subject to intense discussion. The current plan involves a revaluation of properties currently in the higher council tax bands.
Specifically, the tax would focus on homes in bands F, G, and H, potentially affecting around 100,000 properties across the country. The initial concept was for a 1 per cent annual levy on properties valued at £2 million or more.
However, due to significant concerns about the potential impact on the London housing market, where such property values are more concentrated, the government is considering a cap. This could limit the maximum annual charge for any single household to £5,000.
Broader Implications and Market Reaction
The inclusion of a mansion tax represents a major policy development and is likely to generate considerable debate. The cap appears to be a compromise measure, aiming to increase revenue from valuable assets while mitigating the risk of destabilising the prime property market, particularly in the capital.
Alongside the property focus, the confirmed taxes on gambling companies and banks indicate a targeted approach to sectors perceived as able to contribute more to the public purse. The full details and the precise mechanics of how the mansion tax will be implemented and enforced will be closely scrutinised when Rachel Reeves rises to speak in the House of Commons on Wednesday.
