Chancellor Rachel Reeves' new mansion tax on properties valued above £2 million will affect approximately 160,000 homes across England when it takes effect in April 2028, according to the Office for Budget Responsibility. The policy introduces a high-value council tax surcharge across four valuation brackets, starting at £2,500 annually for homes between £2 million and £2.5 million and rising to £7,500 for properties worth £5 million or more.

The tax, announced in the November Budget, targets fewer than 1% of properties, primarily concentrated in London and the southeast. The OBR estimates the levy will raise approximately £400 million by 2029-30. Unlike traditional council tax bands, the surcharge requires a comprehensive revaluation of the highest-value homes - one of the largest such exercises in decades.

Property owners subject to revaluation can expect significant pushback, with the OBR projecting that about 20% will appeal their valuations. Of those appeals, roughly 40% are expected to succeed. Estate agents have already reported buyers and sellers attempting to circumvent the tax through "price bunching" - agreeing on asking prices below the threshold bands. The OBR estimates this behavioral change will reduce the actual number of affected properties by about 5%, bringing the total to approximately 156,000 homes in the first year of implementation.