'Mansion tax' threshold could drop to £1.5m, hitting 271,000 homes and raising London's total bill to £624m

From the Newshound archive · first published 21 September 2026.

Chancellor John Healey is actively considering lowering the mansion tax threshold from £2m to £1.5m, with the change reportedly confirmed as a "live discussion" in the Treasury ahead of the October 28 Budget. Healey is under pressure to find around £10 billion to balance the books after the Iran war sent borrowing costs soaring. The government is reportedly taking a more "aggressive" approach to taxing wealth.

London homeowners in Hammersmith and Fulham, Wandsworth, Kensington and Chelsea, Westminster and Camden stand to bear the heaviest burden from the broadened levy.

The uncertainty is already reshaping London's property market, with luxury rents soaring 67 per cent this year to an average of £4,177 per week.