One of the most controversial measures in today’s Budget is the so-called ‘mansion tax’, applying to properties valued above £2 million. Heavily trailed in recent weeks, the policy is intended to raise revenue from high-value homes, but critics argue it risks creating regional inequality and significant financial strain for many households.

Helen Clarke, partner at Irwin Mitchell’s Private Client Advisory Team, said 

"This will disproportionately impact London and the South East, where property values often exceed £2 million. In reality, a £2m home in London is typically a modest terraced house, not a sprawling mansion, yet many affected homeowners are asset-rich but cash-poor, particularly older individuals.

"This creates financial strain and potential regional inequality. While deferral schemes are suggested, they only partially address liquidity challenges. Property-holding structures may face additional cash flow pressures, potentially forcing asset sales or restructuring.

“The measure could also accelerate the departure of wealth from the UK and drive more movement out of London - similar to the Covid trend - towards areas with lower property prices.”