The High Value Council Tax Surcharge, widely referred to as the mansion tax, is a new annual charge on residential properties in England valued at £2 million or more in 2026. It is due to begin in April 2028 and will be paid in addition to existing Council Tax. Annual charges will range from £2,500 to £7,500 depending on the property’s band. Fewer than 1% of residential properties in England are expected to be affected.
The detailed rules are still being developed following a government consultation that closed on 14 July 2026. Owners whose homes may be close to a band threshold should keep an eye on further announcements.
What is the High Value Council Tax Surcharge?
The High Value Council Tax Surcharge, or HVCTS, is a new charge for owners of higher value residential property in England. It was announced in the November 2025 Budget and is sometimes called the mansion tax in media coverage.
The charge applies to homes valued at £2 million or more on a 2026 value basis. It will sit alongside the existing Council Tax system rather than replace it. Local authorities will collect the charge on behalf of central government.
The government forecasts that the surcharge will raise around £430 million each year from 2028 to 2029 to support local government services.
The bands and annual charges
Properties within scope will be placed into one of four bands according to their value.
| Property value in 2026 | Annual surcharge |
|---|---|
| £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 |
The government has stated that charges will be uprated annually in line with CPI inflation. Revaluations are expected every five years, with the next planned for 2033. The approach to any future changes to the band thresholds will be considered alongside those revaluations.
When does it start and who pays?
The High Value Council Tax Surcharge is due to start in April 2028. Local authorities are expected to issue the first bills to liable owners in March 2028 for the 2028 to 2029 financial year.
The owner, rather than the occupier or tenant, will usually be liable. Where a property has joint legal owners, they will be jointly and severally liable. For a long leasehold property, the consultation proposes that liability will usually sit with the long leaseholder rather than the freeholder.
The surcharge applies in England only. Existing Council Tax will continue to be payable alongside it.
The consultation proposes exemptions or discounts for several property types, including homes owned by registered social housing providers. It also considers arrangements for tied accommodation, charities, companies, trusts and other complex ownership structures. These details are not yet final.
How will properties be valued?
The Valuation Office, which forms part of HMRC, will carry out a targeted valuation exercise to identify homes within scope. The published consultation refers to property values in 2026. It does not specify an exact valuation date within that year.
The Valuation Office proposes using the comparable method, which considers sales of similar properties and reflects relevant differences between them. This is the same broad method used for Council Tax banding. It will not rely on one sale alone.
To manage a large scale exercise, the Valuation Office will use a model assisted approach. This combines automated valuation models with professional valuer judgement. The models use recent sales data and property information such as:
- Property type
- Size
- Age
- Number of rooms
- Parking
The Valuation Office will also use information from its property database, Stamp Duty Land Tax records, publicly available local authority plans and geospatial data. Professional valuers will review and assure banding decisions, with greater emphasis on individual property information where sales evidence is limited or a property is less typical.
This is particularly relevant for individually designed homes, period houses, converted buildings and other properties with limited close comparables. A model can provide an initial estimate, but an accurate assessment still depends on reliable property information and appropriate comparable evidence.
For a fuller explanation of valuation methodology, read how surveyors calculate market value.
The band boundary problem
The published charging structure has clear thresholds. A property valued below £2 million will not fall within the surcharge, while a property valued at £2 million will enter the first band and attract a £2,500 annual charge.
The same step changes apply at £2.5 million, £3.5 million and £5 million. A relatively small difference in the assessed value could therefore place a property in a different band with a higher annual charge.
This does not mean a home near a threshold has been incorrectly valued. It does mean that accurate evidence is especially important where a banding decision is close to one of the published limits.
An independent valuation will not determine the Valuation Office’s band. It can, however, provide evidence based on the relevant valuation date and the property’s individual characteristics if an owner wishes to query a banding decision.
How to challenge the valuation
The Valuation Office expects to publish a draft list of properties in scope in late 2027. During the draft list period, owners will be able to contact the Valuation Office to correct factual inaccuracies relevant to the banding decision, such as incorrect information about the property’s size or accommodation.
Once the final list is published, an owner who believes the property is in the wrong band can make a formal challenge to the Valuation Office. The government proposes an initial eight month period for challenges when the surcharge is introduced. Later challenges would generally have a six month time limit after a new banding decision.
If the Valuation Office does not change the band, the owner may be able to appeal to the Valuation Tribunal for England. A separate challenge may be made to the local authority where there is a question over liability or the bill itself. The consultation proposes that the surcharge must continue to be paid while a challenge or appeal is considered, with any overpayment refunded or adjusted if the decision changes.
The Office for Budget Responsibility’s costing assumes that 20% of affected owners will appeal and that 40% of appeals will succeed. These are forecasting assumptions for the policy costing, rather than a prediction of the outcome in an individual case.
An independent valuation may help support a challenge where it identifies relevant comparable evidence or property information that has not been reflected in the banding. It does not guarantee that the Valuation Office or Tribunal will alter the band.
What owners near the threshold should do now
If a home may be worth close to or above £2 million on the 2026 basis, it is sensible to understand its market position before the Valuation Office’s draft list is published.
Owners may wish to keep clear records of the property’s accommodation, floor area, parking, condition and any material alterations. This information may be relevant if the Valuation Office requests confirmation of its records or if a factual correction is needed.
An independent valuation can be particularly useful where a property is unusual or where there are few closely comparable sales. The instruction should state the purpose of the valuation and the relevant date so the valuer can advise on the appropriate basis of assessment.
Brian Gale Surveyors is an independent Chartered Surveying practice based in Reigate. Established in 1985, the practice provides residential property valuations across Surrey, Sussex, Kent, Hampshire, London and the wider South East. Valuations are prepared by RICS Registered Valuers using market evidence and professional judgement.
To discuss whether a report may be appropriate for your circumstances, view our independent RICS property valuation service or ask about a Red Book valuation.
Brian Gale Surveyors provides independent valuation advice, not tax or legal advice. Tax and legal advice should be obtained separately where required.
To discuss an independent assessment, book a valuation before the 2027 notices.
