Autumn Budget 2025: Key impacts for high-value property owners

The Autumn Budget 2025 has brought clarity and significant changes for owners of high-value properties. As specialists in the prime and ultra-prime market, Ferrari Real Estate is committed to helping you understand how these changes may affect your property, investment strategies, and the wider market.

What’s new under the Budget

High-value council tax surcharge (“Mansion Tax”)
The government will introduce an annual surcharge on homes valued over £2 million, effective from 1 April 2028. Properties will be revalued in 2026 by the Valuation Office and placed into bands, with the surcharge ranging from £2,500 (homes worth £2–2.5 million) to £7,500 (homes above £5 million). This is in addition to existing council tax and is the responsibility of the homeowner.

Higher taxation on rental income for landlords
From 6 April 2027, rental income will be taxed at higher rates: 22% (basic rate), 42% (higher rate), and 47% (additional rate), up 2 percentage points across each bracket. This aligns property income tax more closely with earned income and may impact net yields for landlords and investors.

No changes to Stamp Duty Land Tax (SDLT) or reliefs
SDLT thresholds and reliefs remain unchanged. Buyers in the prime market can continue to rely on existing stamp duty rules, providing certainty for those considering property transactions.

Implications for the high value properties 

Rising ownership costs
The new surcharge will increase recurring costs for high-value property owners. This may prompt some to reassess whether retaining certain properties is financially advantageous, particularly for homes not occupied full-time.

Impact on ultra-prime buyer demand
The annual surcharge may influence buying patterns at the very top of the market. Some buyers may pause or reconsider purchases, while properties just below the threshold could see sustained demand.

Pressure on rental yields
Higher taxation on rental income is likely to reduce net yields for landlords, leading some investors to rethink buy-to-let strategies. This could gradually affect rental supply and exert upward pressure on rents in the high-end segment.

Certainty for buyers
No changes to SDLT provide stability, encouraging buyers below the £2 million threshold to act with confidence.

How Ferrari Real Estate Can Help

Ferrari Real Estate provides tailored advice for high-value property owners navigating these changes:

• Accurate valuations reflecting projected 2026 revaluations

• Strategic guidance for landlords and investors facing increased tax burdens

• Market insights for timing sales and optimising property marketing

For owners or prospective buyers in the prime and ultra-prime market, our team offers expert support to make informed decisions and protect long-term value.