A rumoured tax raid on sales of properties over £1.5m would be a disaster for Londoners, says James Evans

With the Treasury neither confirming nor ruling out the prospect of a so-called ‘mansion tax’ – a capital gains levy thought to be based on the sale of primary residences above £1.5m – uncertainty is already rippling through London’s property market. While official details remain unconfirmed, the rumour is having an impact (especially in London and the Southeast) where many properties exceed the proposed threshold.

It’s important to recognise that £1.5m sounds like a fortune in some parts of the UK. Yet in London, it’s often the price of a two or three-bedroom flat. Or a modest family home in an up-and-coming postcode. According to the latest ONS figures, the average UK house price rose by 3.0 per cent to £273,000 in the 12 months to August 2025. In London, average prices are more than double that. In many neighbourhoods £1.5m is far from a mansion.

Currently, capital gains tax (CGT) isn’t levied on the sale of a primary residence. It only applies to second........

© City A.M.