Islay Robinson examines the potential impact of the October 2026 Budget on the UK property market, exploring reported changes to capital gains tax, the High Value Council Tax Surcharge and what buyers, sellers and property investors should consider before making their next move.

The Chancellor’s Budget on Wednesday 28 October could influence decisions across the UK property market, particularly for owners of high-value homes, property investors and borrowers considering their next move.

In the run-up to the announcement, several reports have suggested that John Healey has ruled out two measures that had been widely anticipated. However, no final Budget decisions have been confirmed, and the position on some proposals remains uncertain.

For property owners, the distinction matters. Reports about potential tax changes can influence decisions before anything becomes law, but I would be cautious about making a significant financial commitment based on speculation alone.

Capital Gains Tax: Could Property Investors Have More Certainty?

Reports published on 20 October, including in The Times, suggested that the Chancellor had rejected calls to increase capital gains tax rates, having already dismissed proposals to align them with income tax rates.

Under current rules, higher-rate taxpayers generally pay capital gains tax at 24% on residential property gains, while basic-rate taxpayers generally pay 18%, subject to the applicable rules and individual circumstances.

The potential impact of an increase is not straightforward. HMRC has estimated that raising the higher rate by 10 percentage points could reduce receipts by £3.6bn in 2028–29, partly because people might be less inclined to sell assets. However, the reports have not been confirmed by the Treasury, so I would not treat the issue as settled until the Budget statement.

If rates remain unchanged, some owners who have delayed selling investment property may feel more comfortable proceeding. That is my interpretation rather than a prediction. Any effect on listings and completed transactions would take time to emerge, and much would depend on wider market conditions.

Mansion Tax: Is the £2 Million Threshold Staying?

The Sunday Times and the Financial Times have reported that the Chancellor would not lower the proposed £2 million threshold for the annual charge on high-value properties, officially the High Value Council Tax Surcharge. Earlier reports suggested that a £1.5 million threshold could have more than doubled the number of homes in scope.

The proposed charge is expected to begin in April 2028, with annual payments ranging from £2,500 to £7,500. The final details and implementation remain important, so property owners should wait for confirmed policy before making decisions based on the reported position.

For owners of higher-value homes, the threshold matters when considering the long-term cost of holding a property. However, it is only one factor among many, including financing costs, maintenance, liquidity and the owner's wider financial circumstances.

Which Property Tax Changes Could Still Be Announced?

While reports suggest that two measures may have been ruled out, other proposals remain under discussion.

These include a possible increase in the surcharge on bank profits above £100 million, from 3% to 8%, as reported in the press on 16 October. Advisers have also discussed stamp duty on share transfers involving property-rich companies, changes to the rules for purchases of six or more dwellings, and potential measures affecting people who leave the UK.

The implications would vary considerably. Changes to the way property-owning companies are taxed, for example, could affect how some transactions are structured without directly changing the underlying value of a property.

This is where specialist advice becomes particularly important. Tax decisions should be discussed with a qualified tax adviser, especially where a transaction involves company ownership, multiple properties or a change in residency. From a financing perspective, the ownership structure in place when a lender assesses an application can influence the options available.

If you expect to restructure ownership or change how a property is held, it is worth raising this at the outset of a financing discussion rather than waiting until an application is underway.

What About the Your First Home Scheme?

The Budget is also expected to provide further details of the proposed Your First Home equity loan scheme.

The reported outline includes a 2.5% deposit and a 20% equity loan for first-time buyers purchasing eligible new-build properties in England. The eligibility requirements, repayment arrangements and other conditions will be important in determining who can benefit. An equity loan is still borrowing that must be repaid, and new-build homes can carry a price premium over comparable existing homes.

For prospective buyers, the scheme could influence affordability and the amount of mortgage borrowing required. However, it would be premature to make a purchase decision before the final terms are published and lenders confirm how the arrangements will work in practice.

Could the Property Market Become Busier After the Budget?

I think the weeks following 28 October could see some activity from buyers and sellers who have been waiting for greater clarity. If certain tax changes are not introduced, some people may feel more confident about proceeding with plans they have put on hold.

That does not necessarily mean there will be an immediate increase in prices or transactions. Property decisions depend on several factors, including pricing, financing costs, buyer demand and individual circumstances. The Budget is one part of that picture.

There is also a practical consideration. If a number of buyers and investors decide to move forward at the same time, lenders, valuers and solicitors may face increased demand. Financing that has already been assessed and progressed may be better placed to move forward than an application that has not yet started, although timing will always depend on the transaction and the parties involved.

At Enness Global, we work with a network of more than 1,000 lenders. Starting a financing discussion early can help establish the available options, identify any structural issues and prepare the documentation needed for an application. It does not guarantee approval or a particular completion date, but it can reduce the risk of avoidable delays.

My View: Wait for the Decisions, but Prepare Now

The key message ahead of the Budget is to distinguish between what has been reported and what has actually been confirmed. The capital gains tax position remains subject to uncertainty, while the reported decision on the mansion tax threshold still needs to be considered alongside the final policy details.

For anyone considering buying, selling or refinancing property, I would avoid making a major decision solely in response to pre-Budget headlines. Instead, use this period to review your objectives, understand your financing options and speak to the appropriate tax and legal advisers.

Once the Chancellor has delivered the statement, there should be a clearer basis for assessing the implications. Being prepared now may help you respond more efficiently when the details are known.

The Budget statement is scheduled to follow Prime Minister’s Questions on Wednesday 28 October 2026.

Important Information

This article is for general information only and does not constitute personal financial, mortgage, tax or investment advice. Budget proposals reported before the announcement may change and should not be treated as confirmed policy. Lending decisions, rates and terms depend on individual circumstances and lender criteria. Property values can fall as well as rise. Enness does not provide tax or legal advice. Reported positions are correct as at 22 October 2026.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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