From 6 April 2028, a new charge, the High Value Council Tax Surcharge (HVCTS) will apply to owners of residential property in England valued at £2 million or more. The new tax is commonly referred to as the ‘mansion tax’. The charge will apply in addition to the existing council tax charge.

The government estimate that fewer than one per cent of properties will fall within the scope of the charge.

Liability for the charge will fall on the homeowner rather than the occupier where the property is not owner-occupied. To determine whether a property is within the scope of the charge, the Valuation Office will conduct a targeted valuation exercise. Revaluations are to be conducted every five years. Properties valued at more than £2 million will be placed in a band according to their value, with a charge set for each band. The charging structure for 2028/29 is set out below.

The charge will increase each year in line with rises in the CPI. It will be administered by local authorities alongside council tax.

Consultation

Earlier this year, the Government consulted on the detailed design of the charge. The consultation document set out:

• the design of the HVCTS;

• how the ‘owner’ should be defined;

• the proposed support mechanism for those who cannot pay;

• the proposed list of property level discounts and exemptions;

• the billing and the administration process;

• the process by which a homeowner can challenge their banding or their liability;

• the enforcement mechanisms for the charge;

• an assessment of the impact on those with protected characteristics; and

• the approach to valuations.

• At the time of writing, the government had yet to respond to the consultation.

The legislation to give statutory effect to the HVCTS is to be included in a future finance bill.