The Autumn Budget delivered several key updates that will shape the future of the UK property market.
At the end of November, we heard Chancellor Rachel Reeves set out the government’s budget plans for the next 4 years. From mansion tax to a further freeze on tax thresholds, it was a lot to take in.
But, what does this mean for the property market? We’ve focused on what matters most, summarising the key updates for estate agents. This is your guide on how it’s likely to impact landlords and homeowners, and how agencies can respond to the changes.
New annual charge on high-value homes (Labelled the “Mansion tax”)
Homes valued at £2 million or more will face a new annual surcharge added to their council tax bill. This is not a one-off stamp duty-style charge, but a recurring yearly cost.
Who is affected?
- Owners of luxury homes
- Prime London property owners
- High-end landlords and investors
- High-value second-home owners
Early modelling suggests around 300,000 homes will fall into this category, with an estimated average cost of £4,000 per year and significantly more for properties far above the threshold.
For estate agents working in prime markets, this will shape buyer affordability, vendor strategy and pricing expectations over the next several years.
When does this come into force?
The government has given a long lead-time, with implementation set for April 2028.
This provides a window for:
- Portfolio and valuation planning
- Tax restructuring
- Pre-2028 sales activity (expect some vendors to exit early)
- Adjusted pricing strategies for homes sitting close to the threshold
Agents should anticipate increased valuation requests and more pricing sensitivity around the £2m mark.
Broader tax changes affecting landlords
After previously being scheduled to freeze until 2028, income tax thresholds will now be frozen until 2030. This means, as people earn more or receive pay increases, they could be pushed into a higher tax band.
Who is affected?
Landlords receiving rental income are facing the possibility of paying more tax, in an already strained economic climate. When they raise rental costs, even if just to be in line with inflation, they could be faced with a higher tax bill.
When does this come into force?
Tax thresholds have been frozen since 2022, and this will now continue until at least 2030.
Dividend tax increases (from April 2026)
There will be a 2% increase to the basic and higher rates of tax on dividends.
Who is affected?
Landlords who are operating through limited companies will be impacted, especially those withdrawing profits via dividends.
When does this come into force?
April 2026
Swerving on Stamp Duty
Despite speculation, the Budget did not introduce a nationwide property tax, remove stamp duty, switch stamp duty to sellers, or add NI to rental income.
Who is affected?
For agents and landlords, this means no immediate disruption to buying or selling processes in this area.
Pension and salary-sacrifice reforms
The amount that is exempt from National Insurance contributions (NICs) is changing. It will soon be capped at £2,000 a year for employee contributions made via salary sacrifice.
Who is affected?
Changes reduce the advantage of using salary sacrifice for pension contributions. Landlords using company structures or pension-heavy strategies may feel the impact.
When does this come into force?
Changes to salary sacrifice for pensions will come in from April 2029
A record-high national tax burden
The UK tax burden is now projected to hit 38% of GDP, the highest in modern history.
For the housing sector this signals:
- Tighter household budgets
- Slower market activity
- Reduced investor appetite
- Heightened scrutiny of ongoing property costs
Who is affected?
People operating in the high-end property market are expected to feel the impact first.
Agents should anticipate:
- Cooling demand: Higher running costs make luxury homes less attractive to both domestic and international buyers
- Longer time-to-sell: Expect extended listing periods and more negotiation pressure.
- Pre-2028 sell-offs: Some owners may choose to exit before the tax hits.
- Downward pressure around the £2m threshold: This will likely create a new “psychological price ceiling”, similar to the previous Stamp Duty thresholds.
For the wider market:
Although the mid-market is not directly taxed, expect indirect effects:
- Distortions around the £2m threshold may pull prices downward
- Increased supply as high-end owners exit
- Rental demand and yield calculations may shift as investor behaviour changes
These changes may reshape local dynamics even in areas far from the luxury markets.
How you can support your clients through these changes
Uncertainty creates opportunity for agents who step up, educate themselves and offer trusted guidance throughout the changes.
Clients will be looking for:
- Accurate valuations (especially near the £2m threshold)
- Future-proofing advice before April 2026
- Insights on local tax impacts and demand trends
- Rental yield and cash-flow modelling for investment decisions
- Portfolio-wide scenario planning
This is a significant moment for agents to strengthen relationships with landlords and homeowners.
How Alto helps agents
As tax pressures grow, landlords and agents will need clearer visibility of their numbers than ever before. By providing a hub for portfolio management, financial forecasting and more, Alto is the ultimate strategic partner during times of change.
With Alto, you can:
- Get a clear view of your portfolio performance, easily identify properties that need to be reviewed.
- Deliver informed strategic decisions on disposals, acquisitions or rent adjustments.
- Automate admin-heavy tasks, to free up your time for more hands-on customer service.
This budget represents a structural shift in how high-value property is taxed. While the most dramatic impacts will fall on £2m+ homes, the wider sector will feel the effects through revaluations, behavioural changes and a slowing economic backdrop.
Agents who proactively communicate, advise and guide clients now will be best placed to win trust, instructions and long-term relationships. At Alto, we are here to play a central role in delivering that clarity and confidence.
