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Post updated: December 1st, 2025
KEY INFORMATION
Here are the key announcements of the Budget 2025 that will affect homeowners.
Owners of £2m+ homes in England will be hit by an annual levy of up to £7,500 per year, under the new mansion tax announced by Chancellor Rachel Reeves in the Budget 2025.
The mansion tax, officially called the High Value Council Tax Surcharge, will be collected alongside council tax from April 2028.
According to the Office for Budget Responsibility, the mansion tax is expected to raise £0.4 billion in 2029-30.
According to guidance on the High Value Council Tax Surcharge issued by the government: “The Valuation Office will conduct a targeted valuation exercise to identify properties above £2 million and therefore in scope. Fewer than 1% of properties in England are expected to be above the £2 million threshold. Revaluations will be conducted every five years.”
The government has also announced it will publish a consultation in early 2026 on the implementation of a “new, simpler ISA product to support first time buyers to buy a home”.
Once available, this new product will be offered in place of the Lifetime ISA.
This will be welcomed news to first time buyers. The Lifetime ISAs offer a generous boost to your first time buyer deposit – you’ll get a 25% bonus from the government on your savings, worth up to £1,000 per year.
But you must buy a property worth under £450,000. If you want to buy a property worth more and need to withdraw your savings, you’ll pay a withdrawal fee to do so.
Until any changes are made, the government has confirmed the limit of how much you can save into a Lifetime ISA will remain £4,000 for the tax year starting in 2027.
The annual cap on the amount that can be saved into a cash ISA has been slashed from £20,000 to £12,000. However, the over 65s will retain the full £20,000 allowance.
Under 65s will be encouraged to put the remaining £8,000 of their allowance into a stocks and shares Isa.
Also, if you’re saving in a traditional savings account outside of an Isa wrapper, you’ll face higher taxes from 2027. If you go over your personal savings allowance, the amount of tax you’ll pay will increase by 2%.
This means basic-rate taxpayers will pay 22%, higher-rate pay 42% and additional ratepayers face a 47%.
Property income tax rates will rise by 2% from April 2027, the chancellor announced in her Autumn Budget.
Rachel Reeves said property income tax would rise by 2% across basic, higher and additional rates, taking these to 22%, 42% and 47%, respectively.
The Office for Budget Responsibility said this will raise around £500million a year in extra tax.
However, Hamptons head of research Aneisha Beveridge said: “Those operating through limited companies will remain unaffected, but for individual landlords who make up the bulk of the market and who are already squeezed by higher borrowing costs and previous tax changes, this could accelerate the trend of investors exiting the market.
“Over time, that risks reducing rental supply and pushing rents higher.”
Announcing cost reductions in energy bills in Great Britain, delivering a saving of around £150 per household on average in 2026.
However, part of this saving will come from ditching the ‘energy companies obligation’, a scheme which helps insulate peoples homes, which adds around £43 to the average bill.
Adam Score, National Energy Action chief executive, said: “Despite the welcome news that the two-child benefit cap is being scrapped and £150 lifted from energy bills, the Budget has blown a huge hole in the government’s strategy to tackle fuel poverty.
“By scrapping the ECO scheme with no successor and no Warm Homes Plan yet in sight, the Treasury has removed the only national scheme focused on fuel poor homes, outside of the social housing sector. Until the government’s Warm Homes Plan is released, there now isn’t a plan for how to end fuel poverty.”
With household budgets already stretched, the prospect of having to pay more tax due to the Budget 2025 will leave many people worried about how they’ll be able to afford it.
While you can’t change the tax rules, you can make sure you do everything in your power to manage your finances as well as possible and see if you can earn more money from your home too.
Making sure you’re on the best mortgage deal is one of the easiest ways to cut household bills.
Get fee free mortgage advice from our partners at L&C. Use the online mortgage finder or speak to an advisor today.
As well as saving on your outgoings, also see if you can increase the amount of money you have coming in. For example, could you make money by:
Find more about these and other ideas in our guide How to make money from your home.
There were so many rumours swirling about what would or wouldn’t be in the Budget that it was hard to keep track.
However, here are a couple of the main rumours – and what happened on the day.
It was heavily rumoured before the Budget 2025 that the Chancellor would hike income tax rates. While this was ruled out before the day itself, income tax didn’t come away unscathed. National Insurance (NI) and income tax thresholds frozen for extra three years beyond 2028, dragging more people into higher bands over time.
It was also rumoured that the chancellor would introducing a cap on lifetime gifting to limit how much money or the value of assets an individual can donate as part of their inheritance tax planning. Or scrap the ‘7-year rule’ for gifts or changing the rules around taper relief. However, these didn’t happen.
The Budget 2025 date was on Wednesday 26 November 2025 – much later in the year than previous Autumn Budgets.
November 24, 2025
October 30, 2025
October 20, 2025
October 13, 2025 
