Mansion levy makes £2m properties harder to sell

By the Editorial Team · Friday, October 16, 2026

Properties priced below £2 million sold at more than twice the rate of those at or above the government’s upcoming "mansion tax" threshold in the third quarter of 2026, with high-value homes also taking longer to sell. This suggests the new council tax surcharge, set to begin in April 2028, could further dampen the luxury housing market already impacted by increased costs and taxes.

Data analysis indicates that properties listed below the government’s new "mansion tax" threshold of £2 million are significantly more likely to sell than those priced at or above £2 million. According to figures from the third quarter of 2026, 53.1 percent of homes valued under £2 million reached the point of exchange between June and September, compared with only 25 percent of listings at or above the threshold.

The statistics, provided by property data and analytics firm TwentyCi, reveal that out of 3,864 properties priced at £2 million or more on the market during this period, only 966 were sold, while 2,898 failed to sell or were withdrawn. These findings have raised concerns about the potentially detrimental effects of the high-value council tax surcharge — commonly dubbed the “mansion tax” — on the upper end of the housing market.

The tax, announced in 2025 by then-Chancellor Rachel Reeves, is set to take effect in April 2028 and will impose additional annual charges on properties in England valued at £2 million or more. The levy ranges from £2,500 for homes between £2 million and £2.5 million, up to £7,500 for properties priced at £5 million or above. This new surcharge will be payable alongside the existing council tax. Market observers note that this measure comes amid an already challenging environment for high-value properties, which has been affected by higher stamp duty rates, increased mortgage costs, and the removal of the non-domicile tax status.

Earlier speculation suggested that John Healey, who succeeded Reeves as Chancellor, might lower the threshold for the surcharge from £2 million to £1.5 million in his first budget on October 28, potentially increasing the number of affected homes from approximately 144,000 to 271,000 based on current valuations. However, Healey ultimately decided against lowering the threshold.

In addition to lower sales rates, the data shows that transactions for homes priced at £2 million and above take longer to complete. Deals above this value averaged 86 days to reach exchange in the third quarter of 2026, over twice the 41-day average observed for properties below the threshold.

Colin Bradshaw, chief executive of TwentyCi, described the analysis as a useful benchmark for agents and lenders to assess future market trends in the high-value sector. The findings underscore the ongoing challenges facing sellers in the luxury property segment and provide early insight into how the upcoming council tax surcharge may influence market dynamics.

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