A Boost for the £500,000+ Market

The biggest win for buyers and sellers is the Government’s decision not to introduce a new annual property tax for homes over £500,000.
Our data shows 210,000 homes currently for sale above this threshold will avoid extra costs — welcome news for owners and a strong catalyst for renewed activity after months of hesitation.
This is particularly positive for London and the South East, where higher-value homes dominate.

New Council Tax Supplement for £2m+ Properties

A new Council Tax High Value Supplement will apply to homes valued at over £2 million, affecting around 0.5% of UK homes, with 85% located in London and the South East.
Expected costs range from ~£2,500 per year for £2m homes to ~£7,500 per year for homes above £5m — lower than many feared, but still meaningful.
The impact around the £2m price point (“the cliff edge”) will depend on how the scheme is implemented.
While £2m+ homes represent only 0.6% of transactions, they account for over 20% of stamp duty receipts, so short-term volatility is possible as homeowners reassess moving plans.

No Stamp Duty Changes

Stamp duty stays unchanged, which keeps costs modest in lower-value markets.
However, thresholds were set in 2014, and with prices up 47% since then, more buyers are being pulled into higher tax brackets.
The number of existing homeowners paying stamp duty above 2.5% of their purchase price has risen from 21% to 33% since 2019 — evidence of growing “fiscal drag.”
There remains a strong argument for future reform or abolition of stamp duty.

Property Income Tax Rise for Landlords

From April 2027, landlords will face a 2% increase across all income tax bands on property income:

• Basic rate: 22%

• Higher rate: 42%

• Additional rate: 47%

This adds further pressure to landlords already managing:

• The Renters’ Rights Act

• Stricter EPC/energy rules

• Higher stamp duty on additional properties (now 5%)

For letting agents, this is a key moment.
Portfolio reviews, compliance support and strategic tax planning will be more valuable than ever — especially among the 50% of landlords currently self-managing, who may now seek professional help.

Stability Returns After Months of Uncertainty

Much of the recent slowdown was driven by speculation rather than policy.
Now that the Budget is out, buyers and sellers can move forward with confidence, and agents can provide clear guidance without caveats.

What This Means for Ali & Co Clients

• For mainstream sellers and buyers:
  Stability has returned; it’s a strong moment to re-engage with the market before the traditional New Year surge.

• For higher-value clients (£2m+):
  Proactive guidance is essential. Ali & Co can help model the impact of the new tax supplement and explore options to move, sell, or restructure holdings.

• For developers and agents in the £500k–£2m range:
  With no new annual tax, pent-up demand is likely to return — particularly in London and the South. Now is the time to refresh marketing strategies ahead of the Boxing Day and early-2026 activity spike.