Many of the key financial trends likely to affect those working and living in Mayfair this year are influenced by the UK government's annual budget, announced at the end of November. The tax changes brought in by Labour since it took power in 2024 have already altered the landscape for wealthy individuals and those working with them, and these changes are set to gather pace this year. Yet there may also be some surprising opportunities to save, or make, money
Words: Robin Amos
The high-value council tax surcharge represents the first systematic attempt to shift the burden of council tax towards the top end of the property market. From April 2028, residential properties valued at £2 million and above will attract an annual charge ranging from £2,500 to £7,500, on top of existing council tax liabilities. Market modelling suggests the surcharge will have an impact on prices, with Treasury analysts forecasting a two to three per cent fall in value for properties near the £2 million threshold.
This equates to £40,000 to £60,000 on a £2 million home. Given that the average sale price of a home in Mayfair was £2.93 million this year, according to Rightmove, few households here and in the surrounding area will be unaffected.
The surcharge will be based on a nationwide revaluation this year, the first comprehensive reassessment since council tax bands were introduced in the early 1990s. The measure is expected to raise about £430 million per year – a relatively modest sum in the context of total public finances.
For long-term owners, particularly those whose wealth is concentrated in residential property, the surcharge adds to a growing stack of recurring costs. The broader implication is clear: high-value property is now viewed as a revenue source rather than a politically protected asset.
Fine Wine: 2026 could be a good year (to invest)
Against a backdrop of rising taxes on property, income and capital, interest in alternative assets has become increasingly data-driven. Fine wine drew renewed attention in 2025 as markets stabilised following a two-year correction. Market analysis from WineFi for the three months to the end of October showed the global fine wine market recorded its first positive quarter since mid-2022. It marks a clear inflection point following a fall of up to 20 per cent from the post-pandemic peak. From a longer-term perspective, fine wine's appeal remains compelling.
Over the past 10 years, leading wine indices have delivered cumulative returns well in excess of 200 per cent, outperforming bonds and many equity benchmarks. Tax treatment also remains a key factor. In the UK, most fine wine qualifies as a wasting asset, meaning gains are generally exempt from capital gains tax. In an environment where CGT rates are rising and reliefs are being narrowed, that exemption has become materially more valuable. While short-term price movements should not be overstated, the data suggests that 2026 may be a good year – and not just from the perspective of a sommelier.
What does the tourist levy mean for Mayfair?
Another budget measure with a potentially disproportionate impact on this part of London is the proposal to allow local mayors to introduce an overnight tourist levy. While no rates have been set, international comparisons provide useful context. In Paris, tourist taxes range from €1 to over €15 per person per night, depending on accommodation type, generating more than €150 million (£132 million) annually for the city. Similar levies operate across much of Europe, often contributing meaningfully to transport, public realm and cultural funding.
The British government estimates that a modest levy of £1 to £2 per night could raise hundreds of millions of pounds nationally. However, the structure differs from many continental models. Under UK consumer law, accommodation providers would need to incorporate the levy into advertised prices, meaning it would function as a direct cost to operators rather than a visible add-on for guests.Industry groups argue this matters.
Britain's hotel occupancy has only recently returned to pre-pandemic levels, while operating costs remain elevated. Energy costs are still about 40% higher than in 2019, and labour shortages continue to push up wages. In that context, even a small levy could erode thin margins. How the levy is received in practice will depend heavily on how consistently it is applied and how funds are reinvested into the visitor economy If managed well, the proceeds could provide a boost for London's most popular areas.
The wealthy are leaving
Overlaying these individual policy changes is a broader statistical trend that has attracted growing attention: the cross-border movement of high-net-worth individuals. HMRC data shows that the top 1 per cent of income tax payers contribute up to 30 per cent of total income tax receipts. Even small shifts in residency patterns can therefore have outsized fiscal consequences.
According to the Henley Private Wealth Migration Report 2025, published in June last year and subject to some criticism over its methodology – including its use of data sourced from social media – the UK was projected to see a net outflow of approximately 16,500 millionaires by the end of last year. This was the largest net loss globally.
A survey by Savanta, cited by the Financial Times in July, found 26 per cent of millionaires in Britain were either very or somewhat likely to change their tax domicile within 12 months, rising to 29 per cent among those holding more than £5 million in investable assets. Previous tax changes introduced by Labour governments, such as the abolition of non-dom status, have been among the main drivers behind this potential exodus.
In a landscape where tax, lifestyle and investment returns are increasingly interconnected, the impact of government policy on the character of the capital – and on the Mayfair area in particular – could be stark this year.
