Top 1% of UK homes face new surcharge from 2028
Key Points
- The Treasury has opened an eight-week consultation on the new High Value Council Tax Surcharge, an annual charge on residential properties in England worth £2 million or more.
- Charges range from £2,500 a year for properties between £2 million and £2.5 million up to £7,500 a year for those worth more than £5 million.
- The surcharge takes effect from April 2028 and is expected to raise around £430 million a year for local government services.
- Fewer than 1% of properties in England are expected to fall within scope, with the Valuation Office Agency running a targeted exercise to identify them.
- Homeowners rather than occupiers are liable, local authorities will collect the surcharge alongside existing council tax, and revaluations will run every five years with the next due in 2033.
The Treasury has opened a consultation on a new surcharge for English homes worth £2 million or more, starting in April 2028.
Annual charges under the High Value Council Tax Surcharge will range from £2,500 for properties valued between £2 million and £2.5 million up to £7,500 for those worth more than £5 million.
The Treasury launched the consultation on Monday (19 May), expects fewer than 1% of properties in England to fall within scope, and projects revenue of around £430 million a year to support local government services.
“A £10 million mansion in Mayfair should not be paying less council tax than an ordinary family home in Darlington or Blackpool,” said Dan Tomlinson, Exchequer Secretary to the Treasury.
“This change tackles historic unfairness, so that those with the most valuable properties pay their fair share, helping to rebalance the system and putting money back into communities up and down the country.”
The average band D council tax bill across England now stands at £2,280 a year, around £250 more than a £10 million Mayfair property pays under the City of Westminster’s band H charge.
Council tax bands have not been adjusted since the system launched in 1992, leaving the highest-value homes paying flat rates set against early 1990s valuations.
The Valuation Office Agency will conduct a targeted exercise to identify properties above the £2 million threshold and place them into one of four new bands.
The government will then revalue those properties every five years, with the next revaluation due in 2033. Homeowners, not occupiers, will be liable for the new surcharge, and local authorities will collect it alongside existing council tax.
The eight-week consultation covers the design and scope of the charge, a deferral mechanism for owners who cannot pay, the billing and appeals process, and administration and enforcement.
The Treasury is inviting responses from taxpayers, local government, tax experts, legal professionals and the property industry.
