Chancellor Rachel Reeves is expected to announce a mansion tax on over 100,000 high-value properties in this week's Budget, aiming to raise between £400 million and £450 million for the Treasury. The tax will apply to homes worth more than £2 million, with an average surcharge of £4,500, according to reports.
The tax will be based on a revaluation of properties in council tax bands F, G and H, which cover around 2.4 million homes. Homeowners will be allowed to defer payment until they die or move house, to avoid forcing those who are 'asset rich and cash poor' to sell up.
The threshold was raised from an earlier proposal of £1.5 million amid concerns about the impact on London homeowners. However, the Office for Budget Responsibility has warned that the plans could slow down the top end of the housing market.
Business Secretary Peter Kyle apologised for the speculation surrounding the Budget, saying it has been 'as frustrating for me and the chancellor as it has for everyone else'. He acknowledged the pressure on ministers to be open about policy direction while respecting Budget confidentiality.
Other expected measures include scrapping the two-child benefit cap, extending the freeze on income tax thresholds, and introducing a pay-per-mile tax for electric vehicle drivers. The Chancellor is also set to confirm the triple lock on state pensions, giving 13 million pensioners an above-inflation rise next April.
CBI boss Rain Newton-Smith warned that firms are concerned about a 'stop-start economy' and urged the government to avoid 'death by a thousand taxes'. She specifically called for action on business energy costs and the Employment Rights Bill, which she described as 'damaging'.
