The UK’s new mansion tax is now forecast to affect around 165,000 homeowners when it comes into force in April 2028, about 45,000 more than early estimates suggested.
The fiscal watchdog, the Office for Budget Responsibility (OBR), says the levy on properties worth over £2 million could raise roughly £400 million in its first year, rising to £435 million by 2030‑31.
However, as many as four in 10 valuation appeals are expected to succeed, potentially reducing the number of homes ultimately charged.
Article continues belowHow many will pay the mansion tax?
The surcharge will apply to homes in tiered bands above £2 million, with annual charges ranging from £2,500 up to £7,500 depending on value.
According to the OBR’s projections:
- About 71,000 homes fall into the lowest affected band (£2m–£2.5m).
- Around 79,000 homes are valued between £2.5m and £5m.
- 15,000 homes are at the top end, paying the highest surcharge.
The total tax yield is forecast at £400m in 2028‑29, increasing to around £435m by 2030‑31.
Appeals and behavioural impact
The OBR expects roughly one in five homeowners subject to the tax to lodge an appeal over their valuation.
Because the surcharge bands are narrow and based on revaluations, about 40% of those appeals are assumed likely to succeed, potentially reducing the effective tax base.
The watchdog also flagged that behavioural responses, such as homeowners selling or pricing houses just below £2 million to avoid the tax, could slightly reduce the number ultimately liable.
Regional patterns and policy context
Homes in London and the South East are expected to make up a disproportionate share of those affected because of higher prices in those areas.
The levy is part of a wider autumn budget package aimed at reforming property taxation and funding broader fiscal goals; in the OBR’s projections it is expected to generate significant revenue over the decade.
