There is plenty for property owners and advisers to digest this month. Now that the Autumn Budget is out of the way, and the "mansion tax" revealed as the headline measure, it is hoped that increased certainty will encourage renewed activity in the prime residential market in 2026. It is still early days, but with the threat of more severe measures now off the table, buyers and sellers may feel more confident to proceed with transactions, leading to an uptick in instructions as the market digests and settles into the start of a new year.
The High Value Council Tax Surcharge, widely referred to as the “mansion tax”, will come into effect from April 2028, and will see residential properties in England valued over £2 million subject to an annual charge, in addition to existing council tax. While this will particularly affect prime properties in London and the South East, the measure is less severe than many had anticipated, with a clear banding structure and relatively modest annual charges compared to earlier proposals. However, there remains concern for asset-rich, cash-poor homeowners, especially those whose property values have risen sharply over time without a corresponding increase in income. The accuracy of property valuations will be crucial, particularly for homes close to the band thresholds, and details on exemptions and reliefs are still under consultation, including potential support for those in complex ownership situations, as discussed by Antonia Cosby.
In the rural property sector, the First-tier Tribunal’s decision in Goudman-Peachey v HMRC has provided important clarification for buyers and owners of country estates, as examined by Eve Drysdale and Louise Moore. The tribunal confirmed that genuine commercial activities, such as farming, grazing, hay production, and infrastructure projects, can mean that substantial parts of an estate are treated as non-residential for SDLT purposes. This allows qualifying estates to benefit from the lower mixed-use SDLT rates, rather than the higher residential rates that would otherwise apply. The case highlights the need for thorough, fact-based analysis and robust evidence when assessing SDLT liability. For advisers and buyers, early and detailed consideration of how estate land is used can make a significant difference to the tax position and overall transaction costs.
Finally, for those owning homes on private estates, the Government’s consultation on estate management charges is a welcome development. Many freehold homeowners have long faced a lack of transparency and limited recourse when it comes to estate charges, often paying for the upkeep of communal areas without the protections afforded to leaseholders. The consultation seeks to address these issues by considering more standardised information, clearer budgets, and a formal process for consulting homeowners before major works are undertaken, aiming to create a fairer and more accountable system, as discussed by Alison Taylor.