The UK government has launched a consultation on a new High Value Surcharge for residential properties in England, proposing four new council tax bands for the most expensive homes. The reforms, first announced at Budget 2025, aim to rebalance a system that has remained unchanged since 1992.
Details of the Proposed Surcharge
The surcharge targets the top 1% of most valuable properties, specifically those worth £2 million and above. The government states that the changes will put money into communities and local services across the country. The consultation outlines how properties will be identified, valued, and placed in a band for the surcharge.
Full List of Proposed Bands
- Properties valued from £2 million to £2.5 million: £2,500 per year
- Properties valued from £2.5 million to £3.5 million: £3,500 per year
- Properties valued from £3.5 million to £5 million: £5,000 per year
- Properties valued at more than £5 million: £7,500 per year
Charges will be uprated annually in line with Consumer Price Inflation (CPI). Revaluations will be conducted by the Valuation Office Agency (VO) every five years, with the next revaluation scheduled for 2033. Decisions on whether to uprate bands will be taken alongside revaluations and will therefore be for a future government.
Government Statement
Dan Tomlinson, Exchequer Secretary to the Treasury, said: "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."
Consultation Scope
The consultation specifically seeks views on the design of the tax surcharge, proposed scope, a deferral mechanism to support those who cannot pay, the billing process, the proposed appeals process, and administration and enforcement mechanisms.
