The UK government has unveiled plans to overhaul the council tax system, aiming to raise an additional £430 million each year for public services. The proposed changes target England's most expensive properties to address what officials describe as historic unfairness in how households contribute.
Consultation launched on high-value property surcharge
An official eight-week consultation is now gathering feedback on the mechanics of the proposed high-value property surcharge. The review will examine how the process operates, including billing methods, valuation appeals, and which properties fall into the new bracket. Owners of the 1% most valuable properties will be required to contribute more under these plans, which originally surfaced during the Budget in 2025.
Treasury officials say the cash raised will help to fund vital local government services and implement a significant reform to improve fairness within England's property tax system. The government stated: Council tax has remained untouched for decades and has not been readjusted as property values increase. That means that under this flawed system, a multimillion-pound mansion could be paying less council tax than a small family home.
Details of the new surcharge bands
The new surcharge will operate in four bands, beginning at £2,500 for properties worth between £2 million and £2.5 million and reaching £7,500 for homes priced above £5 million. Residences worth more than £2 million will face assessments every five years to keep the system balanced against shifting market values, with the first review set for 2033. People will also be granted the right to formally dispute the official valuation of their residence if they disagree.
Dan Tomlinson, Exchequer Secretary to the Treasury, commented: In the Council Tax system, a band D property in Darlington or Blackpool, today worth around £400,000, pays £2,400 to £2,600 annually. A mansion in Mayfair valued at £10 million in Band H pays around £2,100. A £10 million mansion in Mayfair should not be paying less council tax than an ordinary family home in Darlington or Blackpool. 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.
This adjustment will influence fewer than 1% of households nationwide when it officially goes live on April 1, 2028. It is projected to secure around £430 million annually, providing a substantial boost to the budgets of local councils.
The consultation launched on May 19 seeks the views of taxpayers, local government, tax experts, legal professionals, and those in the property industry.
