Homeowners rush to price properties just under ‘mansion tax’ thresholds
As the real estate market braces for the impending surcharge on second homes and buy-to-let properties set to take effect in April 2028, estate agents are predicting a surge in the practice known as “bunching.” This term refers to the strategic timing of property purchases in order to avoid or minimize tax liabilities. With the deadline looming, many investors and homeowners are expected to accelerate their buying activities, leading to a potential spike in market activity over the next few years.
The forthcoming surcharge, which is part of a broader initiative by the government to address housing affordability and encourage primary residence occupancy, will impose an additional tax on individuals purchasing second homes. Estate agents are already observing an uptick in inquiries from potential buyers looking to secure properties before the deadline. For instance, one agency reported a significant increase in interest from clients who are eager to finalize purchases in order to bypass the additional tax burden. This trend is particularly evident among those looking to invest in vacation rentals or properties that can serve as income-generating assets.
Moreover, the anticipated rush to buy before the surcharge takes effect could lead to increased competition in the housing market, driving prices upward in the short term. Real estate experts warn that this “bunching” could create a volatile market environment, with buyers facing bidding wars as they race against the clock. Additionally, the potential for a market correction post-surcharge, as demand stabilizes, raises questions about the long-term implications for both buyers and sellers. As the 2028 deadline approaches, stakeholders in the real estate sector are advised to stay informed and proactive in navigating this evolving landscape.
Estate agents say ‘bunching’ practice likely to pick up pace ahead of start of surcharge in April 2028
