UK considers non-resident premium for mansion tax on homes above £2mn

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UK considers mansion tax for non-residents

Highlights

UK Treasury consultation considers adding a non-resident premium to the new mansion tax on homes above £2 million, targeting overseas owners.
The mansion tax plan aims to raise £430 million annually from 2028, with sliding council tax charges ranging from £2,500 to £7,500 based on property value.
Government leaves the non-resident premium undecided, citing potential for additional revenue and addressing housing price pressures, with the next tax revaluation set for 2033.

Treasury consultation outlines premium option

As reported by Financial Times, a Treasury consultation published on Tuesday says ministers are exploring whether an additional premium should apply to non-UK resident owners of homes already liable for the new tax. Officials describe the concept internally as an "oligarch premium", although the government says it has not decided to introduce the measure.

Rachel Reeves announced the council tax surcharge in last year’s Budget, targeting the top 1 per cent most valuable properties on a sliding scale. Under the standard plan, homes worth between £2 million and £2.5 million would pay £2,500 a year, rising to £3,500 for homes worth up to £3.5 million, £5,000 for homes worth up to £5 million and £7,500 for properties above that level.

The plan is intended to raise about £430 million a year from 2028. The consultation says an additional amount could be collected from non-UK resident owners if evidence supports the case for a separate premium.

Housing pressure and tax fairness debate

In the consultation, the government says there is interest in understanding whether demand from non-UK resident owners is adding to housing availability and price pressures in high-pressure markets, particularly London. It adds that, depending on the evidence base, there could be a case for applying an extra charge to those owners.

The idea is likely to be welcomed by Labour lawmakers who want higher taxes on wealthy property owners. Dan Tomlinson, a Treasury minister, says the next revaluation of the mansion tax is scheduled for 2033 so that the system remains fair and up to date.

Tomlinson argues that a £10 million mansion in Mayfair should not be paying less council tax than an ordinary family home in Darlington or Blackpool. The consultation keeps the premium under review rather than confirming it as policy, leaving ministers room to decide how far to push taxation of overseas wealth in the housing market.

Our earlier article on the UK Treasury’s proposed voluntary caps on essential grocery prices outlined ministers’ push for supermarkets to limit prices on staples such as bread, milk and eggs, potentially in return for eased packaging rules and delays to planned healthy-food regulation changes. It also highlighted strong resistance from retailers, who argued that regulatory and tax burdens are bigger drivers of food inflation than pricing policy, with discussions still short of any formal agreement.

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