The Chancellor’s Autumn Budget was delivered in a noisy Parliament, yet two new taxation measures stood out clearly for the housing market. A new annual surcharge will be introduced for homes valued above £2 million, often described as a “super council tax”, alongside a 2% increase in tax on income from property, dividends and savings. In Bromley, there have been about 160 sales over £2m since 2020.
The Government expects these policies to raise £2.5 billion combined, and both will influence market behaviour long before they come into force. The surcharge is scheduled for April 2028 and will apply to properties placed into new value based bands above £2 million. Charges will rise annually in line with CPI from 2029–30. The increased income tax on property earnings will begin earlier in April 2027, affecting individual landlords whose returns are already being compressed by higher borrowing costs and recent tax changes.
Although the surcharge targets high value properties, its effects will extend beyond the ultra-prime market. Homes priced close to the £2 million threshold are likely to face strategic pricing
pressure, with sellers incentivised to stay below the band to avoid deterring buyers. This may introduce distortion similar to historic stamp duty thresholds, encouraging price clustering just
under the limit.
Longer term, the annual cost associated with owning a high value home is expected to accelerate moves among older homeowners and heavily mortgaged households, particularly those who have benefitted from historic price growth but are not positioned to absorb an ongoing tax charge. Downsizing activity may increase in the years leading up to implementation, influencing supply in the mid-to-upper price ranges.
The additional tax burden on landlords will also have repercussions. With margins tightening further for those holding property in their personal name, more investors are likely to reassess their portfolios. Continued landlord exits would constrain rental supply, keeping rents elevated and encouraging some landlords to sell rather than reinvest.
Taken together, these measures are likely to create more activity, not less. Motivated homeowners will act before the market adjusts to new tax realities, and those who plan early could benefit from a clearer negotiating position and reduced competition. As pricing strategies become more sensitive, the value of accurate valuation, local expertise and professional sales advice will rise.
For homeowners considering a move, the window before these changes take effect offers a strategic opportunity especially when guided by a well-informed local market expert.
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