Budget 2026: Wealth tax would make London 'worst place' among well-off countries to own property

London will become the worst place among well-off countries to own a property if John Healey introduces a wealth tax, a new report is warning.

They include most of Europe, America, Canada, Korea, Japan, Australia and New Zealand.

Many Londoners have to take out large mortgages to buy a home given the high property prices

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However, the Right-leaning Centre for Policy Studies (CPS) warned against such a move or the imposition of another wealth tax.

“The UK ranks 30th out of 38 OECD countries for the competitiveness of its tax system, according to the 2026 edition of the International Tax Competitiveness Index, published annually by the Tax Foundation,” it stressed.

“If the UK were to introduce a Wealth Tax, it would come last in the Property Tax category, making it the worst place in the OECD to own property or assets.

“It would come 35th overall.”

The property score in the index is calculated using wealth tax, inheritance tax, capital gains tax, stamp duty and other levies.

Chancellor John Healey

PA

However, Daniel Herring, head of economic and fiscal policy at the CPS, said: “Rather than paying any attention to fiscal discipline, the Chancellor is likely to use his upcoming Budget to raise taxes in a bid to fund Labour's ever-growing spending pledges.

“The UK already has a tax system which does little to encourage growth and the options mooted would cause further damage to the economy, and our international standing.”

There will be four “mansion tax” price bands with the surcharge starting at £2,500 a year for properties worth over £2 million to £2.5 million, £3,500 for those valued at £2.5 million to £3.5 million, £5,000 for homes worth £3.5 million to £5 million, and £7,500 for properties worth more than £5 million.

Banks in the Square Mile are set to be hit with higher taxes in the Budget

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He may lower business rates for some firms to try to revive high streets across Britain.