High Value Council Tax Surcharge, The Mansion Tax

In the Autumn Budget, the Government announced that from April 2028 it plans to introduce a surcharge to the current Council Tax for owners of residential property in England worth £2 million or more (as at 2026).

This tax will apply to the homeowner, not the occupier, and will be a recurring annual charge payable in addition to Council Tax. Whilst the additional tax will be collected by local authorities alongside Council Tax, the revenue from the additional tax will go to central government although the local authorities will be compensated for the additional costs associated with the additional administration.

During 2026, the Valuation Office Agency will carry out a valuation exercise to determine a property’s value. Where a property is identified as being worth £2 million or more in 2026, it will then be placed into one of the four bands. Revaluations are set to take place every five years.

The charging structure released with the proposals shows:

The charges will increase in line with CPI inflation from 2029-30.

For landowners and rural businesses owners who may own multiple high value farmhouses, other residential properties as well as a principal house on their estates, this is potentially another annual cost which will need to be met adding to the pressures on already stretched cash flows.   

A public consultation will be held in early 2026 on details relating to the surcharge including addressing exemptions, reliefs, and proposed rules for more complex ownership structures including companies, trusts, partnerships, and funds. Unlike Council Tax, whilst the tax is aimed at owners, this could potentially be passed on to occupiers under the terms of tenancy or occupancy agreements.  There is also concern that there may be disputes with the narrow valuation bands. 

We wait to see what further information is released and exactly how some of the practical concerns will be addressed.