The Chancellor’s Budget on 26 November didn’t exactly arrive with a bang. After weeks of leaks and “informed guesses,” the main details were already widely expected – and to top it off, the Office for Budget Responsibility accidentally posted the full information online about 40 minutes before the speech.
But this slow reveal had one big upside for the property world: no sudden shocks. Unlike the market turbulence we saw during Liz Truss’s short time in office, a trickle of information tends to keep things steady. The downside? Many buyers and sellers felt stuck in limbo, waiting for the official announcement before making their next move.
And once the Budget finally dropped, the financial markets reacted fast. Sonia swap rates – an important ingredient in mortgage pricing – fell within hours, although they have been steadily climbing since.
So, what does this Budget actually mean for you?
The So-Called “Mansion Tax” (High Value Council Tax Surcharge)
The Government’s official term is the High Value Council Tax Surcharge (HVCTS), but the nickname “Mansion tax” has very much stuck. Don’t be misled by the name, though – this applies to any home worth more than £2 million, including modest homes in expensive areas.
The new annual charges, beginning April 2028, are:
- £2,500 for homes worth £2M–£2.5M
- £3,500 for £2.5M–£3.5M
- £5,000 for £3.5M–£5M
- £7,500 for homes over £5M
This could prompt some owners – especially those who are “asset rich, cash poor” – to bring forward their plans to sell.
How Might This Affect Prices?
We expect to see values bunch up just below the key thresholds. Buyers may prefer, for example, a £1.9M home over a £2.05M one with a tax attached. That means:
- Prices just under each threshold may strengthen
- Prices just over may soften
- Some buyers may “play it safe” by aiming well below the limits (e.g., £1.6M–£1.8M)
Who Will Carry Out the Valuations?
Valuations will take place every five years. Typically, tax valuations are carried out by RICS-qualified surveyors, but the sheer number of properties caught by the surcharge may push the Valuation Office Agency to take a central role. We expect clearer guidance as consultations progress.
Landlord Tax Changes: A Tougher Landscape
Landlords were once again in the spotlight. The Budget confirmed a 2% rise in Income Tax on rental income from April 2027, bringing rates to 22%, 42% and 47%.
There’s also:
- A 2% rise in dividend tax
- Reliefs and allowances on rental, savings, and dividend income only applying after other income
- Ongoing conversations with devolved governments about future tax powers
For landlords already grappling with tighter regulations and low capital growth in many areas, this may be the final push to reassess whether property investment still works for them.
As more landlords consider exiting the market – or switching to company structures – the supply of rental homes may tighten further. First-time buyers could benefit, but renters may face even fewer options.
What Farmers & Rural Landowners Need to Know: APR and BPR Changes
The Budget also brought major updates to Agricultural Property Relief (APR) and Business Property Relief (BPR) – hugely important tools for inheritance tax planning in the rural sector. Here are the key points:
1. The £1 Million APR/BPR Allowance Can Now Be Transferred Between Spouses
From 6 April 2026, any unused proportion of the deceased spouse or civil partner’s £1 million allowance for 100% APR/BPR can be transferred to the survivor. Even better, if the first death occurred before 6 April 2026, HMRC will assume the full allowance is available. This is a significant boost for succession planning in farming families.
2. The £1 Million Allowance Is Frozen Until 2031
Originally due to rise with inflation in 2030, the allowance will instead remain fixed until April 2031. With agricultural land values rising faster than inflation in many regions, this freeze could pull more estates into taxable territory.
3. Anti-Avoidance Measures Affecting Agricultural Land
The Government is tightening rules to prevent inheritance tax avoidance involving offshore structures. The big change is that UK agricultural property held via non-UK entities will now be treated as UK-situated for IHT (effective 6 April 2026). This closes a loophole used by some corporate and trust structures. If your farm or estate has a more complex ownership arrangement, early advice is essential.
4. IHT Trust Exit Charges Capped at £5 Million
For historic trusts set up by formerly non-domiciled individuals, exit charges will be capped at £5 million from April 2025. Not every rural estate will be affected, but for those that are, this offers valuable clarity.
What Should Farmers and Landowners Do Now?
With APR/BPR rules shifting and allowances frozen, the next 12–18 months are an important window for planning. We recommend:
✔ Reviewing ownership structures
Especially if offshore entities or trusts are involved.
✔ Updating succession plans before April 2026
The new spousal transferability could make some plans more tax efficient.
✔ Obtaining up-to-date valuations
Rural land values have risen sharply – knowing where you stand is crucial.
✔ Checking whether farming businesses should restructure
The mix of Income Tax changes, IHT adjustments and diversification strategies means many businesses could benefit from a holistic review.
How Geering Surveyors Can Help
This Budget brings meaningful changes for homeowners, landlords, farmers and rural landowners alike. Whether you’re:
- planning a sale before the Mansion tax kicks in,
- assessing your rental portfolio in light of new tax rates, or
- reviewing APR/BPR exposure for your farm or estate…
…we can provide valuations, advice and strategic guidance tailored to your plans.