The tax — an annual levy on homes worth more than £2m— has long been a cherished Lib Dem policy, which the Tory party have repeatedly refused to concede to.
In his Autumn Statement the chancellor said a new tax on property would be “intrusive, expensive to levy, raise little and the temptation for future chancellors to bring ever more homes into its net would be irresistible”.
The decision will come as a relief to wealthy UK home owners and overseas property investors.
Phil Nicklin, head of real estate tax at Deloitte, said: “Having announced a 15 per cent stamp duty land tax charge and annual tax on residential properties worth over £2m in last year’s Budget, it will be a relief for many that the chancellor has firmly put to bed the idea of an additional mansion tax.”
No changes were made to the stamp duty land tax – however Osborne has said he will reveal more detailed plans on the levy next week.