Autumn Budget 2025: What the Property Tax Changes Mean for You

The recent Autumn Budget brought significant property tax changes that will affect homeowners, buyers, and landlords across the UK. At Clarendons, we've analysed the announcements to help you understand what they mean for the South East property market and your next move.

Key Points You Need to Know

Major relief for homes over £500,000: The feared new annual property tax on properties over £500,000 isn't happening. This is particularly significant for our region, where a substantial portion of properties fall into this bracket.

New tax on £2m+ properties: A Council Tax High Value Supplement will apply to homes worth £2 million or more. This affects around 0.5% of UK homes, with 85% located in London and the South East - meaning this change will impact many properties in our market area.

Stamp duty remains unchanged: The current stamp duty rates and thresholds stay as they are, though it's worth noting these were set in 2014 and haven't kept pace with house price growth in our region.

Landlords face increased costs: Property income tax rates will rise by 2% from April 2027, adding to existing pressures on landlords from recent regulations and higher stamp duty on additional properties.

What This Means for the South East Market

The Uncertainty is Over

Over recent months, intense speculation about potential property tax changes caused many buyers and sellers to adopt a "wait and see" approach. This hesitation slowed activity significantly across the South East, with many higher-value transactions put on hold.

Now that the Budget has been announced, that uncertainty has lifted. While there are some changes to be aware of - particularly for properties over £2 million - the removal of the feared £500k threshold tax means the majority of our clients can move forward with confidence.

Huge Relief for Properties Over £500,000

This is the most significant outcome for the South East market. With a large proportion of homes in our region valued over £500,000, the threat of an additional annual property tax had caused considerable concern and market hesitation.

The removal of this threat is excellent news for the thousands of homeowners across the South East who can now proceed with their property plans without fear of an extra tax burden. We expect this to unlock pent-up demand and reinvigorate activity in this crucial segment of our market as we head into 2026.

If you've been holding off listing or making an offer on a property in this price range, now is the time to act.

The £2 Million Property Tax - A Local Concern

Unlike most of the country, the new Council Tax High Value Supplement on homes worth £2 million or more will have a noticeable impact in the South East. With 85% of affected properties located in London and our region, this is something we need to take seriously.

The Chancellor announced an annual additional cost of around £2,500 for homes worth £2 million, rising higher as values exceed £5 million. For a £2 million home, this is less than double the average council tax and less than many feared, but it's still a new recurring cost to factor into ownership.

What does this mean if you're buying or selling near the £2m threshold?

There may be some impact on properties approaching this value, though how significant remains to be seen. The way this scheme is rolled out will be crucial. While we may see some short-term caution, it could also prompt activity from homeowners looking to sell before the tax takes effect or to avoid the additional annual burden.

Our team is here to help you navigate these considerations and model the financial implications for your specific circumstances.

Stamp Duty - The Growing Burden

With no changes to stamp duty rates, buyers across the South East continue to face significant upfront costs. The challenge is that stamp duty thresholds were set back in 2014, while house prices in our region have risen dramatically since then.

This creates what's known as "fiscal drag" - buyers of average-priced homes in the South East are now paying a higher proportion of their purchase price in stamp duty than ever before. Since 2019, the number of homebuyers paying more than 2.5% of their purchase price in stamp duty has jumped from 21% to 33%.

For many of our clients, stamp duty represents a substantial hurdle. While we'd welcome future reforms to address this, for now it remains an important factor to build into your moving budget.

Impact on Landlords and the Rental Market

The 2% increase in property income tax rates from April 2027 will affect landlords across all price points in the South East. Combined with:

• Recent regulatory changes from the Renters' Rights Act
• New energy efficiency requirements
• Increased stamp duty on additional properties (now at 5%)

...landlords are facing mounting financial and administrative pressures.

At Clarendons, we understand these challenges. Our experienced lettings team is here to help landlords navigate these changes, ensure compliance with all regulations, and maximise the return on investment properties. If you're a landlord concerned about these cumulative costs, professional guidance has never been more valuable.

Time to Make Your Move

The biggest takeaway from this Budget is the removal of uncertainty. For properties under £2 million - which represents the vast majority of transactions even in the South East - the changes are manageable and shouldn't prevent you from moving forward with your plans.

If you've been holding off on buying or selling because of Budget uncertainty, there's no need to wait any longer. The traditional post-Christmas bounce in property activity will be here before you know it, and getting ahead of that surge could work in your favour.

How We Can Help

Whether you're:

• Looking to buy or sell a property over £500,000 and relieved by the Budget news
• Considering a move near the £2 million threshold and need expert guidance
• A first-time buyer or homeowner navigating stamp duty costs
• A landlord needing support with increased tax burdens and regulatory compliance

Our experienced team at Clarendons is here to support you. With deep knowledge of the South East property market and decades of combined experience, we can provide personalised advice tailored to your specific circumstances and property goals.

The uncertainty is behind us. The market is moving forward. And we're here to help you make your next move with confidence and clarity.

Ready to discuss your property plans? Get in touch with Clarendons today. Call us, visit one of our offices, or contact us through our website to speak with one of our property experts.

The property market waits for no one. With the Budget announcement behind us and the New Year approaching, now is the perfect time to take action on your property goals.