Introducing the Budget’s new wealth taxes
This is the second of a series of articles analysing details of the recent Autumn Budget statement and the impact these measures will have on business owners, their advisors and private individuals.
One of the clearest differentiation points between the latest Budget and the previous one is its focus on taxing wealth more directly. Changes to income tax have grabbed a lot of the headlines, but the signs all point in one direction: this government is going for wealth rather than income, now and in the future.
For high-value property owners, business directors and their advisors, planning for the future must take into account taxation of assets and tighter long-term rules. In this article, we’ll examine these new wealth taxes and how they will affect the way you do business.
The ‘mansion tax’
High-value residential properties in England will now face a new charge, dubbed the ‘mansion tax’. It will be collected in the same way as council tax. The structure is straightforward:
- Homes valued between £2 million and £2.5 million pay £2500 annually
- Homes over £5 million pay £7,500
- A sliding scale applies for homes valued between £2.5-5 million
The mansion tax will land hardest in London and the South East, where the country’s most expensive properties are located. Of course, the extra revenue from these properties won’t remain with the local councils that collect it. It will be redistributed across the country.
High-value homeowners now have new questions to consider. The costs of owning a ‘mansion’ rise instantly, making long-term planning more complex. People with large properties will need to review how these new charges align with their overall financial position, especially as other wealth taxes take hold around them.
Beyond the mansion tax
The mansion tax was the latest attempt by this Chancellor to tax wealth directly, but it probably won’t be the last. The build-up to the 2025 Budget involved a range of proposals and a lot of kite-flying in the media. Some of these ideas didn’t come to fruition, at least not this time. But the fact that they were discussed means the government is focusing on the property market in a big way.
For example, there was talk about Capital Gains Tax (CGT) being applied to main residences above specific values. While it wasn’t included in the Budget, the direction of travel suggests high-value properties are under scrutiny. There was also speculation that the Chancellor would make changes to Stamp Duty Land Tax (SDLT) to encourage more people to buy and sell properties.
Owners now need to think about:
- Higher ongoing cost of property ownership
- Future tax raises
- How these changes align with future planning (e.g. business, retirement)
How wealth taxes interact with other changes
The new wealth taxes shouldn’t be viewed in isolation. Several other Budget decisions push high-value individuals into a tighter position.
The freeze on income tax thresholds until 2031 pulls more people into higher tax bands as their wages rise. For business owners, taxes on dividends are also rising, with the basic and higher rates increasing from the 2026-27 tax year. These increases are designed to fall on individuals with substantial assets, investment income streams, and higher-value properties.
When combined with the mansion tax, they form a more structured, unified approach to targeting wealth rather than work for tax rises. When planning for the future, it’s essential to factor in the possibility of more taxes to come, or existing ones rising higher.
Impact on individuals and advisors
Business owners with high-value homes and significant assets are concerned about their long-term exposure. They need clarity on these new wealth taxes, how they fit in with other financial obligations such as inheritance tax (IHT), pensions (and how they fit into estates) and the changes to dividend taxation.
Advisors across tax, financial planning and corporate finance are seeing increased interest in asset reviews and restructuring. Property ownership is becoming an even greater component of long-term financial strategy, alongside pensions, trusts and gifting. When it’s clear that the Treasury has its eye on wealth, this shift towards a more integrated picture is no surprise.
Don’t get caught out
The recent Budget demonstrates a greater emphasis on taxing wealth rather than income. The most visible sign of this is the mansion tax, but it’s backed up by other policies like dividend taxes and tax threshold freezes. Property is subject to a higher tax burden than ever before. People with high-value homes will feel the impact of these changes first.
There’s no indication that the government’s focus on wealth will diminish over time. It’s more likely that it will increase. So, early planning and a joined-up approach to property, income and business is essential for anyone looking to limit their exposure and prepare for the years ahead.
Accentuate by K3 Hub – The Autumn Budget: a comprehensive analysis
On Monday 1st December 2025, we held an Autumn Budget webinar at which our keynote speaker, Jeremy Mindell, Director at Primondell Ltd, analysed the details of the statement and provided a comprehensive overview of the latest economic and public financial outlook.
Jeremy was joined by a panel of experts discussing the economy, the deals market, stealth taxes and other measures affecting businesses and private individuals.
The panel included:
Kelly Mitchell
Managing Director, Restructuring & Insolvency
Quantuma
Ian Barton
Managing Director, Corporate Finance
Quantuma
Marcus Pilkington
Chartered Financial Planner
Pareto
Holly Bedford
Managing Director, Tax Advisory
K3 Tax Advisory Limited