On 26 November 2025, Chancellor Rachel Reeves delivered her second Autumn Budget. The weeks leading up to it had been filled with speculation as to what changes to property-related taxes. Would Stamp Duty rates change again? Were we about to see Capital Gains Tax levied on sales of family homes? The whirring rumour mill left property owners and purchasers with plenty to worry about.
As it turns out, the reality was far more measured. Whilst one significant change affects owners of high-value properties, the wholesale reforms many feared simply didn’t materialise. Here’s what actually happened and what it means for you.
The headline change: a new surcharge for high-value properties
The main property-related announcement was the introduction of a new council tax surcharge on homes valued over £2 million, set to take effect from April 2028. Dubbed the ‘mansion tax’, this measure only targets the very top of the market (fewer than 1% of homes) and is expected to generate £0.4 billion by 2029-30.
The surcharge is tiered, based on property value. Homes worth between £2 million and £2.5 million will face an annual additional charge of £2,500, rising to £7,500 for properties exceeding £5 million.
If you’re affected, the 2028 start date gives you breathing space to consider your position. However, there are legitimate concerns about the impact on those who are asset-rich but income-poor, particularly older homeowners who’ve lived in their family homes for decades and may struggle to meet recurring annual charges.
For high-value property owners, now is the time to seek advice. With nearly three years before implementation, you have the opportunity to explore your options and make informed decisions about your property and wider estate planning.
What didn’t change: reassurance for most homeowners
Stamp Duty Land Tax stays put
Despite widespread speculation about potential reforms or even abolition, Stamp Duty rates and thresholds remain unchanged from those announced in the 2024 Budget.
First-time buyers still benefit from zero stamp duty on properties up to £300,000 (for purchases up to £500,000). For everyone else, the threshold remains at £125,000. The 5% surcharge on second homes and buy-to-let properties, which increased in last year’s Budget, continues to apply.
If you’re buying now or planning to in the near future, you can budget with confidence.
No capital gains tax on main homes
Perhaps the biggest relief was the absence of any new Capital Gains Tax on main residences. Pre-Budget chatter suggested CGT might be introduced on homes sold for over £1.5 million or £2 million, causing understandable concern.
It didn’t happen. Private Residence Relief remains fully intact. When you sell your main home, you pay no capital gains tax, regardless of its value or how much it’s risen since you bought it.
This relief applies only to your primary residence. Second homes, holiday properties and buy-to-let investments remain subject to CGT on sale at the current rates: 24% for higher-rate taxpayers and 18% for basic-rate taxpayers. These rates were set in last year’s Budget and remain unchanged.
What the Budget means in practice
Buyers can move forward with purchase plans based on existing Stamp Duty rates. Make sure you account for all associated costs, legal fees, surveys, and removal expenses, alongside stamp duty itself. Early financial preparation and working with an experienced conveyancer will help ensure a smooth transaction.
Sellers of main homes don’t have any Capital Gains Tax to worry about.
Owners of those properties valued over £2 million, whilst the new surcharge doesn’t take effect until 2028, it’s worth considering your long-term plans sooner rather than later.
Landlords and property investors should remember that Capital Gains Tax continues to apply to investment properties at last year’s rates. Factor this into your calculations when planning any sales.
How Farleys can help
Property transactions involve substantial financial and legal considerations, and keeping pace with policy changes is essential. Our Residential Property team stays on top of every development and understands how market shifts affect our clients, whether you’re a first-time buyer, moving home, building a property portfolio, or concerned about the high-value property surcharge.
We’re here to provide clear, practical advice tailored to your circumstances.
If you’d like to discuss how the Autumn Budget affects your property plans, get in touch by filling out our online contact form or calling us on 01254 606 008. For a quote for your legal fees for buying or selling a property, please use our quote generator below.
