Starting in April 2028, approximately 165,000 homeowners in England will be subject to a new High Value Council Tax Surcharge, often referred to as a “Mansion Tax,” introduced by HMRC under the Labour Party government. This surcharge targets properties valued over £2 million, with annual charges scaling according to the value band of each home.
The additional annual fees will be as follows:
- £2 million to £2.5 million: £2,500
- £2.5 million to £3.5 million: £3,500
- £3.5 million to £5 million: £5,000
- Over £5 million: £7,500
Paula Higgins, CEO of the HomeOwners Alliance, commented, “It’s clear the government wants higher-value homeowners to contribute more. We await further details from the upcoming public consultation in early 2026 but remain cautious about whether the necessary property revaluations can be completed accurately and on time.”
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Ms. Higgins also expressed concern that this surcharge could be just the start of increasing tax burdens on homeowners. “Once introduced, such measures tend to expand, with thresholds remaining static, resulting in more people being caught by the tax,” she noted.
She warned that the arbitrary value bands might lead to market distortions, causing a rush of sales just below the surcharge thresholds, a phenomenon recognized by the Office for Budget Responsibility (OBR).
According to government budget documents, local authorities will administer the new surcharge on behalf of central government and will be fully reimbursed for any administrative costs. The revenue generated is intended to support funding for local services, with additional decisions to be made during the spending review in 2027.
The government plans to consult on the detailed implementation of the High Value Council Tax Surcharge in the new year, including considerations of who might require financial support to meet the charges and the best methods of delivery.