The government is facing fresh controversy after refusing to rule out applying its new mansion tax to farms across the UK. This move has sparked immediate concern within the agricultural sector, which is already grappling with recent tax changes.
Tax Uncertainty for Farmers
A spokesperson for the Prime Minister indicated that the final scope of the tax, including its application to agricultural properties, would be determined by an upcoming consultation. This leaves farmers with properties valued at over £2 million in a state of uncertainty. The proposed levy is set to be implemented from 2028.
This is not the first time the farming community has been targeted for higher taxes. The announcement follows previous controversy last year when the government revealed a 20 per cent inheritance tax on farms worth more than £1 million.
London Bears the Brunt
While farms may be included, analysis suggests the tax's impact will be heavily concentrated in the capital. According to the Institute for Fiscal Studies (IFS), nearly a quarter of all properties affected by the mansion tax are located in just three London boroughs: Kensington and Chelsea, Camden, and Westminster.
Chancellor Rachel Reeves has also declined to rule out further tax rises, signalling a potentially challenging fiscal environment for high-value asset owners. The government's stance sets the stage for a significant debate on the balance between raising revenue and supporting the UK's vital agricultural industry.
