How could Mansion Tax effect your New Self Build Home?

With the Government’s 2025 Budget confirming that a new Mansion Tax on high-value residential properties will come into effect from April 2028, many self-builders are understandably asking how this will impact projects currently being designed or planned. For those creating homes expected to exceed the £2 million threshold, it’s important to understand how the tax is likely to be applied, when liability begins, and what considerations should be built into your early design decisions.  self-build journey with clarity and confidence.

At Allan Corfield Architects, we work with clients who are often creating large one-off homes in desirable rural or commuter locations across the UK - areas where final property values can easily approach or exceed the £2 million threshold. Below we outline what mansion tax could mean for ongoing and upcoming self-build projects, and what you should be thinking about during the planning and design stages.

WILL  MANSION TAX AFFECT PROJECTS ALREADY IN PLANNING?

The short answer is: yes, potentially - depending on how the policy is applied in 2028.

The Budget announcement highlighted that the tax will be assessed based on the value of the completed property, not the point at which it received planning permission or began construction. This means:

• Homes currently in planning or under construction will only become liable once complete and added to the valuation list

• There is no automatic exemption for projects already underway unless future Treasury guidance introduces transitional relief

• The tax will be recurring annually, similar to how higher council tax bands function

In effect, anyone planning a home expected to exceed £2 million should assume they may fall within the scope of the tax once the property is ready for occupation after April 2028

WHAT DETERMINES WHETHER A HOME FALLS INTO THE £2 MILLION PLUS CATEGORY?

A property’s valuation is influenced by several factors beyond simple size or construction cost, including:

• Location and postcode, particularly higher-value rural and commuter areas

• Plot size and setting

• Internal floor area and overall design

• Specification level and finishes

• Ancillary buildings, garages and leisure facilities

A well-designed home in a high-demand area may exceed the threshold with ease, while a larger home in a lower-value location might remain outside it.

WHAT SHOULD ARCHITECTS BE ADVISING CLIENTS RIGHT NOW?

Architects are not tax advisers, but we do have a responsibility to guide clients on project implications that could affect viability or long-term affordability. At ACA, our approach is proactive, transparent and grounded in practical design considerations.

HIGHLIGHT THE POTENTIAL IMPACT EARLY

We now advise all clients planning homes near or above the £2 million mark that:

• A mansion tax will apply from April 2028

• Liability will be based on the value at completion, not during design

We always encourage clients to obtain tailored advice from a qualified tax specialist.

REASSESS BUDGET AND LONG-TERM OWNERSHIP PLANS

An annual levy may be a manageable cost for some, but for others - particularly those financing larger builds or planning to sell shortly after completion - it could materially influence strategic decisions.

Clients should consider:

• Long-term affordability
• Resale implications
• Financing structure
• Timing of completion relative to 2028
  
  

EXPLORE DESIGN CHOICES THAT COULD INFLUENCE VALUATION

We never design homes specifically to avoid tax, but architects can help shape decisions that legitimately influence final valuation.

Possible considerations include:

Adjusting Floor Area or Specification

• Reducing non-essential floor space
• Simplifying form and materials
• Choosing specifications that meet performance needs without elevating valuation unnecessarily

PHASING THE COMPLETION OF ANCILLARY ELEMENTS

Because valuation usually occurs when a property is deemed complete, some clients may choose to delay:

• Outbuildings
• Landscaping
• Leisure buildings (gyms, pools, garden rooms)
• Secondary accommodation

This can spread investment and control the point at which full valuation takes place.

CONSIDERING MULTI-UNIT ARRANGEMENTS

In certain cases, designing a home as two linked dwellings may better fit lifestyle requirements while keeping each unit below the threshold.

DOCUMENTING THE ADVICE

For clarity and transparency, we record that:

• The potential tax implications have been discussed

• Clients are advised to obtain formal tax guidance

• Design flexibility remains available

This ensures everyone proceeds with full awareness.

WHAT SHOULD SELF-BUILDERS DO NOW?

For anyone planning a high-value home expected to complete after April 2028, we recommend:

• Proceed with design as normal - but stay aware of the confirmed policy landscape

• Build flexibility into design where appropriate

• Consult a tax specialist early in the process

• Consider programme strategy, especially completion timing relative to April 2028

• Focus on long-term value, such as energy performance, sustainability and build quality - features that retain worth regardless of taxation

The introduction of a mansion tax from April 2028 marks a significant shift for the UK’s high-value housing market. While it will affect some self-builders, it does not need to derail well-planned projects. With clear guidance, flexible design thinking and the right professional advice, clients can continue to create exceptional homes that suit their lifestyle, budget and long-term goals.

If you’re planning a self-build home that may exceed the £2 million threshold and would like to understand your design and valuation options, the ACA team is here to help.