Shares of Rightmove plc (LON: RMV) fell 1.37% to 504 pence on Monday, underperforming a rising FTSE 100, after HM Revenue & Customs (HMRC) provided new clarity on how England's upcoming high-value property tax will be administered. The confirmation that most homes valued at £2 million or more will be assessed without in-person inspections removes some administrative uncertainty but leaves the financial burden unchanged.
Starting in April 2028, owners of properties worth £2 million or above will face an annual surcharge ranging from £2,500 for homes at the lower end of the band to £7,500 for those above £5 million. The government projects the levy will raise £430 million from approximately 165,000 properties, equating to an average annual tax of £2,606 per home—roughly 0.13% of a £2 million property's value.
According to the banding table, a home valued at £2.0–£2.5 million incurs a £2,500 surcharge, while a £2.5–£3.5 million property pays £3,500. The rate rises to £5,000 for homes between £3.5 and £5.0 million, and £7,500 above that threshold. The government's costing model assumes a 2.5% price impact, which for a £2 million home translates to £50,000—equivalent to two decades of the minimum surcharge before discounting.
HMRC confirmed that professional valuers will rely on up-to-date, readily available data, meaning in-person inspections will be the exception rather than the rule. This addresses concerns raised by weekend reports suggesting inspectors could request access and impose fines on non-compliant homeowners. However, the valuation process will differ from the existing council tax bands, which still use 1991 valuations, adding a layer of complexity for property owners and agents.
The announcement comes at a challenging time for the UK housing market. Rightmove reported that asking prices fell 2% in August to £364,999, the steepest monthly decline in nearly eight years. Mortgage rates have also climbed to 5.09% from 4.92% in July, further pressuring affordability. Prime London remains particularly weak, with inner London values down 8.3% year-on-year in June, and some central neighborhoods experiencing declines exceeding 20% following earlier tax adjustments.
Rightmove's first-half results, published July 31, showed total revenue of £225.8 million, up 7% year-on-year, with agency revenue growing 9% to £163.9 million. New Homes revenue rose 2% to £38.2 million, but developments fell 6% to 2,766. Underlying operating profit increased 3% to £155.1 million, and underlying EPS rose 6% to 15.6 pence. Agency revenue accounts for 72.6% of total revenue, making estate-agent spending the most direct transmission path for the new tax.
Chief Executive Johan Svanstrom remains optimistic about 2026 despite current New Homes volume challenges, but the company has trimmed its full-year revenue growth forecast to 6%-8%, down from the earlier 8%-10% range. Analysts are mixed: RBC Capital has a Buy rating with a 675p target, Berenberg also rates it Buy at 575p, while UBS and Citi hold with targets of 490p and 486p respectively. Barclays and JPMorgan are more bearish, with Sell ratings and targets of 460p and 429p. The consensus across 19 analysts is a Hold with an average target of 546p.
Investors are now watching for specific valuation guidelines and the outcome of the consultation process. Additionally, Edinburgh will vote on August 27 on a separate second-home premium, keeping property taxes in focus across the UK. The new surcharge affects less than 1% of English homes, and Rightmove's subscription-based model provides some resilience compared to transaction-dependent platforms. However, if high-end sales weaken, the increased complexity of valuations could actually boost demand for Rightmove's data services.
