James Vernor-Miles shares property market insights in Law360
James’s comments were published in Law360, 27 November 2025, and can be seen here.
James Vernor-Miles, head of our Residential Property department, explores the implications of the U.K. government’s decision to extend the freeze on income tax thresholds until 2031.
Originally set to end in April 2028, the freeze introduced during the pandemic has led to fiscal drag, pulling more earnings into taxation. Chancellor Rachel Reeves announced this measure as part of a broader plan to raise £26 billion without increasing headline tax rates, emphasizing the need for a fair and sustainable system to fund public services and economic growth.
Alongside the threshold freeze, Reeves unveiled a new mansion tax targeting high-value properties. Homes worth over £2 million will face a £2,500 surcharge, while those above £5 million will incur £7,500, affecting less than 1% of properties. Vernor-Miles anticipates a surge in sales for homes priced between £1.5 million and £2 million as buyers seek to avoid future levies. Other measures include capping salary sacrifice arrangements at £2,000 from 2029, maintaining the corporation tax rate at 25%, and introducing a 40% first-year allowance for businesses, coupled with a 2-point rise in tax on property, savings, and dividends.
Further revenue-raising steps include significant changes to gambling taxes, such as increasing remote gaming duty to 40% and online betting tax to 25%, expected to generate over £1 billion by 2031. Reeves also announced a mileage tax for electric vehicles starting in 2028, charging 3p per mile for battery EVs and 1.5p for hybrids. While the government projects a £3.9 billion surplus by 2028–29, experts warn of continued financial strain on households due to extended tax freezes and higher levies on savings and investments.
Read the full article on the Law360 website [subscription required].