The 2025 Budget & Prime Property: What Buyers Need To Know

Each Budget brings a predictable flurry of headlines - some dramatic, some misleading, and most unhelpful for anyone genuinely in the market for a prime property.

For my clients buying in Prime Central London or the Cotswolds, the question isn’t “what did the Chancellor say?” but “does any of this change the way I should approach buying?”

The answer: not materially. But there are important nuances to understand - particularly around council tax, valuations, and, crucially, UK Inheritance Tax exposure for overseas buyers.

Below is a clear, measured breakdown.

1. Higher Council Tax Bands: Confirmed, But Years Away

The Government has confirmed that higher-value homes will face increased council tax charges, although details of the banding structure remain incomplete.

Three essential points:

• These changes do not come into effect until 2028

• 2028 is an election year, meaning the proposals may be amended, delayed or withdrawn

• For buyers, this is a holding-cost consideration, not a decision-changing factor

2. The Additional Council Tax Supplement (Not a “Mansion Tax”)

Some media coverage resurrected the term “mansion tax”, but it’s neither accurate nor appropriate. A £2m home in London or the Cotswolds is not a mansion.

What the Government has actually proposed is an additional council tax supplement for the highest-value properties. However:

• It cannot be implemented until after the 2026 revaluation exercise

• The valuation methodology is still unclear

• Execution remains politically contingent

3. Higher Tax on Property Income

Landlords may face a larger share of rental income taxed at higher rates, particularly those holding properties personally rather than through structured vehicles.

This is far more relevant to portfolio landlords than residential buyers.

4. Deferred Payment Options: Speculative, Not Confirmed

Some commentary suggested that owners might eventually be allowed to defer certain charges until sale or death.

Important clarification: this is not a confirmed policy. It is purely speculative.

5. The Real Issue for Overseas Buyers: UK IHT Exposure

While council tax supplements make headlines, the far more significant concern for globally mobile buyersis Inheritance Tax exposure.

What This Means for Prime London

Prime Central London remains driven by fundamentals: global capital flows, scarcity of quality stock, architectural constraints, schooling, connectivity and long-term liquidity.

What This Means for the Cotswolds

The Cotswolds market remains resilient and supply-constrained.

Will These Measures Slow the Prime Market?

Not materially, but they will influence how people buy.

Why Buy-Side Advice Matters More Than Ever

With long-lead proposals, undefined valuation processes, political uncertainty and IHT considerations, there is enormous value in calm, discreet, technical guidance.

My View: Quality Still Wins

Political cycles create noise, but they do not change what buyers look for, or the enduring desirability of London and the Cotswolds.