UK Property 2025-2028: Mansion & Terrace Tax, Inheritance Relief Changes, Green Mortgage Deals & More
The UK property market is bracing for major changes between 2025 and 2028. New mansion and terrace taxes are coming. Inheritance and business property relief rules are tightening. Green mortgages are gaining ground. In the latest London Property Bulletin episode, host Farnaz Fazaipour breaks down these updates. She explains what they mean for homeowners, investors, first-time buyers, and landlords. This guide gives you clear insights and practical strategies to stay ahead in the shifting landscape.
The 2028 Mansion and Terrace Tax: What Homeowners Need to Know
A new mansion and terrace tax is set for 2028. It targets higher-value properties across the UK.
The tax introduces additional council tax bands or surcharges for homes valued above certain thresholds. London properties over £2 million and terraced homes in high-value areas are likely to be hit hardest. Early estimates suggest extra annual charges of £2,000 to £10,000 depending on location and value. This aims to raise revenue while encouraging downsizing among older owners. Many experts warn it could cool the £2 million-plus market further, with 10–15% price softening expected in prime postcodes.
Homeowner Tip: Review your property valuation now. Consider downsizing or restructuring ownership before 2028 to minimise exposure.
Inheritance and Business Property Relief Changes in 2026
Big shifts are coming to inheritance tax reliefs in 2026. These will affect estate planning for property owners.
Business Property Relief (BPR) and Agricultural Property Relief (APR) currently offer 100% or 50% IHT exemption on qualifying assets. From 2026, relief will be capped at £1 million per individual, with 50% relief above that. Furnished holiday lets and some buy-to-let portfolios may lose BPR entirely. The result could be 40% IHT bills on large property estates, adding hundreds of thousands in tax for many families.
Investor Strategy: Move qualifying properties into Family Investment Companies (FICs) before the deadline. This preserves relief and cuts overall tax exposure by 20–30%.
Green Mortgages: Top Deals for Energy-Efficient Homes
Green mortgages are growing fast. Lenders reward energy-efficient properties with better rates.
Leading deals in 2025 include 0.2–0.5% discounts for homes with EPC A or B ratings. Some lenders offer cashback up to £2,000 for retrofits. NatWest, Barclays and Nationwide lead with rates as low as 3.9% for five-year fixed green products. Demand is rising, with 25% more applications for eco-friendly homes.
Buyer Action: Upgrade to EPC B or higher before buying. Secure green mortgage rates and save thousands over the term.
Council Tax Rules and Rental Income Tax Shifts
Council tax and rental income rules are also evolving.
New council tax bands for high-value homes could add £3,000–£8,000 annually in London. Rental income tax changes may raise effective rates for higher-rate landlords to 45%. Landlords are responding by switching to limited companies or selling lower-yield assets.
Landlord Tip: Incorporate rental portfolios now. This cuts tax on profits and protects against future rate hikes.
Your 2025-2028 Property Action Plan
The years ahead bring challenges. However, preparation turns them into opportunities.
Homeowners should review valuations and explore FICs before 2026 relief caps. Investors can target energy-efficient properties for green mortgage savings and stronger yields. First-time buyers should prioritise EPC A/B homes to access the best rates. Landlords need to restructure into companies and focus on high-demand, low-maintenance rentals.
Thrive in 2025-2028 with Property Wealth
Mansion tax, inheritance relief changes, and green mortgage growth are redefining the UK property market from 2025 to 2028. The London Property Bulletin, hosted by Farnaz Fazaipour, gives you the insights you need to stay ahead. At Property Wealth, we turn policy shifts into profitable strategies. Our network connects you with tax specialists, green mortgage brokers, and off-market opportunities.
Ready to protect and grow your wealth through 2028? Connect with us today for personalised advice and exclusive updates.
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