UK New haveli tax About 165,000 homeowners are now predicted to be affected when it takes effect in April 2028, about 45,000 more than initial estimates.
The fiscal watchdog, the Office for Budget Responsibility (OBR), says the levy on properties worth more than £2 million could raise around £400 million in its first year, rising to £435 million by 2030-31.
However, around four in 10 valuation appeals are expected to be successful, potentially reducing the number of homes that are ultimately charged.
Article continues below
How much will the mansion tax pay?
The surcharge will apply to tiered band homes worth more than £2 million, with annual charges ranging from £2,500 to £7,500 depending on value.
According to OBR estimates:
- Around 71,000 households fall into the least affected band (£2m–£2.5m).
- Around 79,000 homes are priced between £2.5m and £5m.
- 15,000 households are at the top end, paying the highest surcharge.
Total tax revenue is forecast to be £400m in 2028-29, rising to around £435m by 2030-31.
Appeal and behavioral impact
The OBR expects that one in five homeowners subject to the tax will lodge an appeal against their assessment.
Because the surcharge bands are narrow and based on reassessments, about 40% of those appeals are considered likely to succeed, potentially reducing the effective tax base.
The watchdog also flagged behavioral responses, such as homeowners selling or Prices houses Avoiding tax may slightly reduce the number ultimately liable, below £2 million.
Regional Patterns and Policy Context
Homes in London and the South East are expected to make up a disproportionate share of those affected by higher prices in those areas.
The levy is part of a broader fall budget package aimed at funding property tax reform and broader fiscal goals; The OBR estimates it is expected to generate significant revenue over the decade.
