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Healey considers slashing 'mansion tax' threshold to £1.5m in Budget raid that could hit 271,000 homes

From the Newshound archive · first published 19 September 2026 · last updated 20 September 2026.

Andy Burnham and John Healey share a pint, as Burnham faces mounting Budget pressure with fiscal headroom reportedly slashed by £15bn and over a million low-income renters facing a record benefit shortfall.
Andy Burnham and John Healey share a pint, as Burnham faces mounting Budget pressure with fiscal headroom reportedly slashed by £15bn and over a million low-income renters facing a record benefit shortfall.

Chancellor John Healey is examining a reduction in the mansion tax threshold from £2m to £1.5m, a change that would more than double the number of homes liable for the annual charge. Two government sources called the proposal a "live discussion" within the Treasury as Healey pursues £10bn to cover a fiscal shortfall before his October 28 Budget. Surging borrowing costs driven by the war in Iran have eroded his fiscal headroom, pushing what one Whitehall source characterised as a more "aggressive" approach to taxing wealth. Analysts put the yield from the change at £800m a year.

Under the expanded tax, owners could face annual bills of up to £7,500, with the majority of affected homes concentrated in London and the south-east.

Healey once dismissed the mansion tax as too 'symbolic' and charged it with playing into 'the politics of envy' when Ed Miliband backed the policy in 2015.

Alongside the mansion tax deliberations, Healey is also weighing a levy on holiday lets worth up to £3,000 per owner and business rates relief for small firms — a simultaneous give and take.

MoreDaily Mail NewsBusiness rates could be cut for thousands of small firms in Budget help for Britain's struggling High StreetsGB NewsLabour plans all-new holiday tax raid that could smash tens of thousands of Britons with £3k costsDaily Mail NewsLabour considers lowering mansion tax threshold to £1.5m in Budget raid on nearly 300,000 households - including many middle-class families in London and south eastThe TelegraphHealey’s mansion tax raid to hit 270,000 familiesThe Droitwich StandardThousands more homes could face mansion tax as Treasury considers lower threshold - NATIONAL NEWS - The Droitwich Standard
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