Wealthy investors ‘will leave Britain over double-whammy mansion tax’
Wealthy investors ‘will leave Britain over double-whammy mansion tax’
Camilla TurnerSat, May 30, 2026 at 1:16 PM UTC
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Rachel Reeves’s mansion tax plan could drive affluent investors out of the UK property market altogether - House of Commons
Wealthy investors will leave Britain over a “double-whammy” mansion tax, Rachel Reeves has been warned.
Expats who own properties worth more than £2m in the UK could be asked to pay an additional “non-resident premium” in addition to the mansion tax, under plans being considered by the Government.
Ministers believe that “demand from non‑UK resident owners may be contributing to pressures on housing availability and prices” in “high-pressure housing markets” like London, according to documents published as part of a consultation into the mansion tax.
But the Chancellor has been warned that the move risks driving wealthy investors out of the country.
Sian Armitage, the tax director of Mark Davies and Associates, said the proposals “might just be the straw that breaks the camel’s back” in terms of convincing wealthy investors to leave the UK altogether.
She told The Telegraph that her clients are already asking how they can exit the UK property market.
Ms Armitage pointed out that wealthy investors who own property eligible for the mansion tax are likely to be net contributors to the British economy – but they feel “pushed out”.
“[They] clearly are not coming to the UK to utilise services for free,” she said. “They will be contributing to the economy, using products, paying VAT and employing staff”.
Ms Reeves unveiled the mansion tax during the last Budget as part of a raid on wealth creation and assets to fund more benefits spending.
Officially known as the high-value council tax surcharge, it will see officials revalue houses in the top three council tax bands of F, G and H.
Those newly valued at more than £2m will then be hit with an extra levy of between £2,500 and £7,500 a year depending on how much they are worth.
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London and the South East are set to be the worst hit by the policy, although many homes in more upmarket rural areas will also be affected.
Mansion tax to hit Londoners the hardest
Sir James Cleverly, the shadow housing secretary, said: “Every day the reach of Labour’s new family homes tax is expanding to trap more and more people. Now some face a double-whammy of charges.
“Labour have made no assessment of the further damage this will do to our already broken housing market, and to the wider economy. Inevitably, it will act as a blocker to house sales, and it will discourage investment, just like Labour’s other tax raids that have made Britain a hostile environment for growth.”
A survey published last year found that a quarter of Britain’s wealthiest families were considering leaving the country amid concern about tax increases under Labour.
The poll, carried out by the wealth manager Saltus, found that VAT on private school fees and inheritance tax were among the factors prompting high-net-worth individuals to look at leaving Britain.
Peter Ferrigno, the director of tax services at Henley & Partners, said bringing in an additional charge for expats on top of the mansion tax will make the system “even more incoherent”.
He said: “This would mean that non UK-investors are even less likely to buy a UK property – if they haven’t already been put off by the additional surcharges on stamp duty, land tax which are enough to put them off anyway.
“The top of the market is dead. There is an excess of high value properties in the market anyway because of all the people who have left.”
Mr Ferrigno said anyone who has the option to move their assets out of the UK is “talking to us” about moving. “They say, ‘you know what, there are other countries that want our money and investment’. Why wouldn’t they go?” he added.
A Treasury spokesman said: “The UK has £10 trillion of capital, a long-term plan for stability and innovation, and the rule of law – we remain an attractive place to live, invest and run a business.
“The Government is inviting views on whether there could be a case for a non-resident premium, as part of a wider consultation which seeks to address a longstanding council tax unfairness in this country. We welcome views from all interested parties, including on whether demand from non-resident owners may be contributing to housing pressures.”
Source: “AOL Money”
