From April 2028, owners of homes in England worth £2 million or more are due to pay a new High Value Council Tax Surcharge of between £2,500 and £7,500 a year, on top of the council tax already charged on the property. It was announced at the November 2025 Budget, is still at consultation stage and has not been legislated. The government expects it to raise around £430 million a year from 2028/29 and to touch fewer than 1 per cent of English homes — the Office for Budget Responsibility put the number at roughly 165,000 properties in 2028/29 before people react to it.
The press calls it a mansion tax. The government does not. This guide sets out what has actually been proposed, who would pay, how homes would be valued, how the charge would sit alongside your existing bill, the honest arguments on both sides, and the parts of the design that are still genuinely unresolved.
What the High Value Council Tax Surcharge is
The surcharge was announced at the Budget on 26 November 2025. The Treasury’s factsheet published that day describes it as “a new charge on owners of residential property in England worth £2 million or more in 2026, taking effect in April 2028”, and confirms that “homeowners, rather than occupiers, will be liable”.
The detail followed six months later. A consultation, High Value Council Tax Surcharge: design and delivery, opened on 19 May 2026 and closed on 14 July 2026. It was run by the Ministry of Housing, Communities and Local Government with HM Treasury and HMRC’s Valuation Office, and was launched by a written ministerial statement from the Exchequer Secretary to the Treasury, Dan Tomlinson. At the time of writing the department is still analysing responses, so nothing here is final.
Two points are worth fixing in your head straight away. First, this is an additional charge, not a replacement: the consultation states that existing council tax bills “will continue to be paid alongside” it. Second, it applies to England only. Local property taxation is devolved, so Scotland, Wales and Northern Ireland are unaffected.
The four bands, and what each would cost
The consultation document proposes a flat annual amount for each of four value bands, uprated each year in line with Consumer Prices Index inflation. It is a slab charge, not a marginal one — a property just over a threshold pays the whole of the higher amount.
| Property value in 2026 | Proposed annual surcharge | Plus an average band D bill |
|---|---|---|
| £2m – £2.5m | £2,500 | £4,892 |
| £2.5m – £3.5m | £3,500 | £5,892 |
| £3.5m – £5m | £5,000 | £7,392 |
| Over £5m | £7,500 | £9,892 |
For scale, MHCLG’s council tax levels statistics for 2026-27 put the average band D bill in England at £2,392, an increase of £111 or 4.9 per cent on the year, with the average bill per dwelling at £1,868 and a total council tax requirement of £46.8 billion. On those figures the smallest proposed surcharge is worth slightly more than an entire average band D bill.
On the money it would raise, two official figures circulate and they are not quite the same. The GOV.UK page publishing the Budget factsheet says the measure “is estimated to raise £0.4 billion in 2029-30”. The consultation and the factsheet also give “around £430 million of revenue per year from 2028/29”. Both are forecasts made before the design was settled, and the OBR expects behaviour to shave the yield.
Who pays: the owner, not the occupier
This is the structural difference from council tax, and it matters more than the headline number. Council tax is normally paid by whoever lives in the property. The surcharge would be paid by whoever legally owns it.
The consultation proposes that the legal owner is liable — the freeholder, or a leaseholder whose lease was originally granted for more than 21 years. Where a lease is shorter, liability would sit with the freeholder. Joint owners would be jointly and severally liable, a company that holds the title would be liable in its own right, and trustees would be liable where a property is held in trust, including under a bare trust.
In practice the split matters less than it sounds, because the consultation reports that over 90 per cent of properties worth £2 million or more in 2024 were owner-occupied. But it is not academic. A tenant renting an expensive house would not be liable; the landlord would. And the government has proposed penalties for withholding ownership information — 10 per cent of the annual liability after 21 days, rising to 30 per cent after a further 21 days, with a right of appeal.
How your home would be valued
Valuation would be done by the Valuation Office, which became part of HMRC on 1 April 2026 when the Valuation Office Agency ceased to exist as a separate executive agency. The consultation describes a targeted valuation exercise rather than a full revaluation of every home in England.
The method proposed is the comparable approach — looking at sale prices of similar properties — supported by automated valuation models and professional valuer judgement, drawing on the Valuation Office’s own property database, Stamp Duty Land Tax data, publicly available local authority plans and government geospatial data. Values would be assessed at 2026 levels. A draft list of properties in scope is due to be published in late 2027, giving owners a chance to correct factual inaccuracies before bills go out in March 2028.
After that, full revaluations are proposed every five years, with the next in 2033. Improvements alone would not change a property’s band: the consultation proposes that the band changes only when the home is sold, split or merged, or at a general revaluation, so a large extension would not pull a home into scope until one of those happens.
Checking whether you are anywhere near £2m
Your council tax band is a poor guide, because English bands are frozen in 1991 money. The gov.uk guidance on how council tax bands are assessed is explicit that bands reflect “the price the property would have sold for on the open market on 1 April 1991”, and the top band, H, is simply everything above £320,000 at that date.
The nearest thing to a free check is HM Land Registry’s sold property prices service, which shows what homes on your street have actually changed hands for in England and Wales. If nothing nearby has sold above about £1.5 million in recent years, you are almost certainly out of scope and can stop worrying about it.
One thing not to confuse: challenging your council tax band is a separate process handled through the same Valuation Office, and it has no bearing on the surcharge. Gov.uk’s guidance on challenging a band sets out when you have a legal right to challenge and how to do it, and is worth reading before you start.
Where the money goes, and who collects it
Councils would do the work. The consultation proposes that local authorities bill and collect the surcharge on the same cycle as council tax, in 12 monthly instalments or 10 if requested, for a financial year starting 1 April. Authorities would be fully compensated for the extra administration.
The money, though, is not the council’s to keep in the way council tax is. The Budget factsheet says local authorities “will collect this revenue on behalf of central government” and that it goes “to support funding for local government services”. So it is raised centrally and recycled into the local government finance settlement rather than added to your own council’s spending power pound for pound.
None of this changes the ordinary system. Your band, your discounts and the way council tax works in 2026 stay exactly as they are. The surcharge is a second, separate liability attached to the property.
The case for it, and the case against
Why supporters say it is overdue
The argument rests on the age of the tax base. England has never revalued: bands still reflect 1 April 1991 values, and band H catches everything above £320,000 in that money, so the scale simply stops. Because band H is open-ended, a home worth £400,000 today can end up paying more council tax than one worth £10 million.
The consultation makes the point bluntly, contrasting a band D property in Darlington or Blackpool “today worth around £400,000” paying £2,400 to £2,600 a year with “a mansion in Mayfair valued at £10 million in Band H” paying around £2,100. MHCLG’s council taxbase statistics show why that bites: of 25.8 million dwellings in England, 43.2 per cent are in bands A and B and only 9.4 per cent in bands F to H. Supporters say a surcharge is the least disruptive way to reintroduce some link to modern values without revaluing 25 million homes.
Why critics say the design is the problem
The first objection is the cliff edge. Because each band carries a flat charge, a home valued at £2,500,001 pays £1,000 more than one valued at £2,499,999. The Office for Budget Responsibility has assumed people respond, and the House of Commons Library briefing on homes over £2 million records the detail: the OBR estimated around 165,000 properties in scope in 2028/29 and 167,000 in 2030/31 before behaviour, falling to about 156,000 and 158,000 once “price bunching below each band boundary”, non-compliance, appeals and fewer high-value new builds are allowed for.
The second is valuation risk. Unlike stamp duty, which is charged on a price someone actually paid, this is charged on an estimate. With four thresholds and a flat charge at each, an awful lot rides on whether a valuer places a house at £3.4 million or £3.6 million, and the proposed appeal route runs through the Valuation Tribunal for England with the surcharge payable while the dispute is live.
The third is the asset-rich, income-poor problem: a pensioner who bought a family home decades ago in an area that has since become expensive faces a bill unrelated to their income. The government has effectively conceded the point by proposing a deferral scheme, but the suggested eligibility is narrow — an annual household income of £35,000 or less or capital savings of £16,000 or less, with deferral also available where the home is that of someone who is disabled or severely mentally impaired, and only for a primary residence.
The fourth is geography. Using Land Registry sales from January 2024 to April 2026, the Commons Library found London recorded 6,057 sales at £2 million and above — more than the rest of England combined — with the Cities of London and Westminster constituency alone accounting for 1,037, or 12 per cent of the English total. A charge that is national in law is regional in effect.
Most of us will never see this bill — but everyone gets the council tax one.
Check your band, your discounts and the premiums that are already being charged today.
Explore GetSmartSaver →What is still genuinely undecided
Plenty. The consultation asked questions rather than announced conclusions on seven areas, including scope, deferral, billing, appeals, administration and enforcement, and equalities. These are the live ones.
- The deferral terms. The government has committed to a scheme letting payment be delayed until the property is sold, secured by a charge on the property. The income and capital thresholds, and the interest rate, are not settled — the options floated were the HMRC official rate, the Bank of England base rate and the adult social care deferred payment rate.
- Trusts and companies. Legal owners would be liable, but the treatment of beneficial ownership behind a trust or a corporate structure is still being worked through.
- Exemptions. Purpose-built student accommodation, service accommodation, diplomatic property, registered social housing, care settings, refuges and new builds before first sale were all proposed for exclusion. Employment-tied properties and charitable properties were flagged as still under review.
- A non-resident premium. The government said it was exploring whether owners who are not UK resident should pay an additional amount, and sought evidence on the housing market effects.
- Appeals timings. An initial eight-month challenge window, then six months, with four months for the Valuation Office to respond and two months for councils on liability disputes, are proposals rather than rules.
- The legislation itself. Nothing has been enacted. The next fiscal event is the Budget on 28 October 2026, confirmed in the Chancellor’s letter to the Treasury Committee of 31 July 2026.
Where this leaves you, and what happens next
For the overwhelming majority of households the answer is: nothing to do. On the OBR’s own numbers, roughly 165,000 properties out of 25.8 million English dwellings would be in scope — about 0.6 per cent on those two figures. There is no form to fill in, no registration, and no action required before the draft list appears in late 2027.
If your home might genuinely be near the line, three things are worth doing now. Keep a record of comparable local sales; note anything that makes your property less valuable than its neighbours; and, if you are a landlord with a high-value let, look at how your tenancy allocates future property-level charges, because liability would sit with you rather than the tenant.
If you are buying at that level, treat the surcharge as a running cost rather than a one-off, alongside the mortgage itself — our mortgage calculator will show you what the monthly repayment looks like, and £2,500 to £7,500 a year on top is a meaningful addition to the true cost of ownership.
And do not lose sight of the charges that already exist. Councils in England can charge up to double the normal bill on a second home and up to four times on a long-term empty one, under the rules on second homes and empty properties. The taxbase statistics show 170,000 dwellings were charged the second homes premium introduced on 1 April 2025 and 153,000 empty dwellings were charged a premium. Those second home and empty property premiums already affect far more people than the surcharge ever will.
Frequently asked questions
What is the High Value Council Tax Surcharge?
It is a new annual charge on owners of homes in England worth £2 million or more, announced at the Budget on 26 November 2025 and due to start in April 2028. It sits on top of your normal council tax bill rather than replacing it, and the amount runs from £2,500 to £7,500 a year depending on which of four value bands your property falls into.
How much is the surcharge and when would I first pay it?
The proposed amounts are £2,500 for homes worth £2m to £2.5m, £3,500 for £2.5m to £3.5m, £5,000 for £3.5m to £5m and £7,500 above £5m, in 2026 prices and rising with CPI each year. First bills are expected in March 2028 for the year beginning 1 April 2028, collected in 12 monthly instalments.
Does the owner or the tenant pay the surcharge?
The owner. That is the main difference from council tax, which the occupier usually pays. The consultation proposes that the legal owner is liable, meaning the freeholder or a leaseholder whose lease was originally granted for more than 21 years. Joint owners would be jointly and severally liable, and companies and trustees would be liable where they hold the title.
How would my home be valued, and could I challenge it?
The Valuation Office, part of HMRC since 1 April 2026, would value properties at 2026 levels using comparable sales, automated models and valuer judgement. A draft list is due in late 2027. The consultation proposes an initial eight-month window to challenge a banding, then six months, with unresolved cases going to the Valuation Tribunal for England.
Does the surcharge apply in Scotland, Wales or Northern Ireland?
No. It is an England-only measure, because local property taxation is devolved. Scotland uses council tax bands based on 1 April 1991 values, Wales uses 2003 values, and Northern Ireland charges domestic rates on capital values as at 1 January 2005. No equivalent £2 million surcharge had been announced in the other three nations at the time of writing.
Will the surcharge change my council tax band or bill?
No. Your existing band and bill carry on unchanged, and the surcharge is charged separately on the same billing cycle. The average band D bill in England for 2026-27 is £2,392, up 4.9% on the year. Council tax bands in England still rest on open-market values as at 1 April 1991 and are not being revalued.
Last reviewed: August 2026. Figures relate to the 2026-27 financial year, which for council tax runs from 1 April 2026 to 31 March 2027, and to proposals set out in the MHCLG consultation that closed on 14 July 2026. The High Value Council Tax Surcharge is an England-only proposal and has not been legislated; Scotland, Wales and Northern Ireland run their own local property taxes and have announced no equivalent. Nothing here is personal financial advice — check your own position on gov.uk, or get free help from Citizens Advice or MoneyHelper, before acting on it.
