With the 2025 Budget fast approaching, uncertainty looms large over the UK’s luxury property market. Industry leaders are bracing for potential tax reforms that could reshape buying behaviour, particularly around higher-value homes. While stability and clarity remain the sector’s greatest hopes, many anticipate changes that could place additional pressure on prime buyers and owners.
Rhianne McIlroy, our Prime Central & South West Advisor, states in Prime Resi: “The introduction of any form of ‘mansion tax’ would likely have the greatest impact on homes priced between £1.5mn and £3mn, particularly those bought with significant borrowing. At this level, many owners are already managing large mortgages, rising finance costs and high running expenses. Adding an annual property charge could make ownership considerably less affordable, especially for households balancing private school fees or other major commitments.
For the £10mn+ market, the effect would be less pronounced as buyers are typically less leveraged. But in the upper middle tier, it could prompt some owners to reassess budgets or delay moving until there’s clarity.”
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