The Labour government is considering lowering the mansion tax threshold from £2 million to £1.5 million ahead of the October 28 Budget, according to government sources. This would substantially expand the tax's reach from 134,000 properties to over 270,000 homes, particularly affecting middle-class households in London and the South East. The move is notable as Prime Minister Andy Burnham previously criticised the tax as overly symbolic and divisive, representing "the politics of envy".

The mansion tax, formally known as a high-value council tax surcharge, was originally introduced with a £2 million threshold and is scheduled to take effect in April 2028, imposing between £2,500 and £7,500 annually on affected properties. Lowering the threshold to £1.5 million would more than double the number of homes caught within the tax. A Whitehall source suggested this option is administratively viable since the Valuation Office is already identifying properties above £2 million, making the expansion a relatively straightforward extension. However, the Treasury has not yet made a final decision, with concerns raised that the change would affect too many modest homes and could potentially discourage property sales.