High Value Council Tax Surcharge
High Value Council
Tax Surcharge
From April 2028, owners of residential properties in England valued at £2 million or more will face an additional annual Council Tax surcharge of £2,500 to £7,500.
The High Value Council Tax Surcharge (HVCTS) is a new annual charge on owners of residential properties in England valued at £2 million or more. It is due to start in April 2028 and will be paid in addition to normal Council Tax.
Properties will be assessed using 2026 property values and placed into one of four HVCTS bands. The initial annual surcharge ranges from £2,500 to £7,500, depending on the property's value. The charge is based on a separate valuation and is not determined by your existing Council Tax band.
What is the High Value Council Tax Surcharge?
The High Value Council Tax Surcharge is an additional property charge announced by the UK Government for owners of the highest-value residential properties in England. It is sometimes described in the media as a “mansion tax”, although High Value Council Tax Surcharge is the official name.
Unlike Stamp Duty Land Tax, which is generally triggered when property is purchased, HVCTS is intended to be a recurring annual charge. Owners will continue to pay their existing Council Tax bill as well as any High Value Council Tax Surcharge for which they are liable.
Who pays the surcharge?
The charge is designed to fall on the legal owner of the property rather than simply the person occupying it.
- Owner-occupiers can be liable
- Joint legal owners can be liable
- Companies owning qualifying homes can be liable
- Liability is attached to ownership of the dwelling
Which properties are affected?
The surcharge is intended to apply to residential dwellings in England worth £2 million or more using 2026 values.
- Houses and flats can fall within scope
- The existing Council Tax band does not decide liability
- Associated domestic gardens and garages can form part of the dwelling
- Some exemptions and discounts remain subject to final rules
High Value Council Tax Surcharge bands
The announced charging structure contains four property-value bands. The surcharge is a fixed annual amount within each band rather than a percentage of the property's value.
| 2026 Property Value | Initial Annual HVCTS | Additional Monthly Cost* |
|---|---|---|
| £2 million to £2.5 million | £2,500 | Approx. £208.33 |
| £2.5 million to £3.5 million | £3,500 | Approx. £291.67 |
| £3.5 million to £5 million | £5,000 | Approx. £416.67 |
| Over £5 million | £7,500 | Approx. £625.00 |
*Monthly figures simply show the annual charge divided by 12 for illustration. The surcharge will be additional to ordinary Council Tax.
How will properties be valued for the High Value Council Tax Surcharge?
A targeted valuation exercise is being carried out to identify residential properties worth at least £2 million. This is separate from the existing Council Tax valuation system.
The Valuation Office is responsible for deciding which HVCTS valuation band a property falls into. The proposed approach uses comparable evidence — broadly, the sale prices of similar properties, adjusted for relevant differences.
Information that may be considered
- Sales of comparable properties
- Property characteristics and location
- Stamp Duty Land Tax transaction data
- Property plans and other relevant valuation data
Not the existing Council Tax band
Existing Council Tax bands in England are based largely on 1991 property values.
HVCTS uses a separate valuation exercise based on modern property values, so being in Council Tax Band G or H does not by itself mean that a property will be subject to HVCTS.
Example: a home valued at £2.3 million
Assume a residential property in England is assessed at £2.3 million using the relevant 2026 value.
It falls into the £2 million–£2.5 million HVCTS band, producing an initial surcharge of £2,500 a year from April 2028, in addition to the property's normal Council Tax liability.
When does the High Value Council Tax Surcharge start?
The government announced the new High Value Council Tax Surcharge as part of Budget 2025.
The £2 million threshold and HVCTS bands are based on property values in 2026.
The government consulted on the detailed design, including valuations, owner liability, support, discounts, exemptions, billing and challenges.
Under the consultation design, local authorities would send the first bills to liable owners ahead of implementation.
Owners of qualifying properties become liable for the surcharge alongside their existing Council Tax.
The announced framework provides for HVCTS properties to be revalued every five years.
Does the High Value Council Tax Surcharge apply to landlords, companies and second homes?
One of the important differences between ordinary Council Tax and HVCTS is that the new surcharge is designed around property ownership.
Landlords and second homes
A residential property does not automatically fall outside HVCTS merely because it is rented out or is not the owner's main home. The key starting points are the property's value, whether it is within scope and who legally owns it.
Landlords with very high-value residential property should therefore include potential HVCTS costs when considering future net rental yields and cash flow.
Properties owned by companies
Under the government's consultation design, where a qualifying dwelling is legally owned by a company, the company would be liable for the HVCTS.
Owners should not assume that transferring a property into a company removes the charge. Transfers can also have separate Stamp Duty Land Tax, Capital Gains Tax and other tax consequences.
What is confirmed and what could still change?
It is important to distinguish the core policy already announced by government from detailed rules that have been the subject of consultation.
✓ Core policy announced
- HVCTS applies to residential property in England
- The starting value is £2 million using 2026 values
- Implementation is planned from April 2028
- Owners, rather than simply occupiers, are the target taxpayers
- Four surcharge bands have been announced
- Existing Council Tax remains payable separately
- The Valuation Office will determine HVCTS bands
⚠ Detailed rules to watch
- Final operation of discounts and exemptions
- Detailed support and payment-deferral arrangements
- Final challenge and appeal procedures
- Some complex ownership and liability situations
- Detailed administrative and enforcement provisions
What if your home is worth over £2 million but you cannot afford the surcharge?
A property's value does not necessarily reflect the owner's income. This can be particularly relevant to long-term homeowners whose property has risen substantially in value, but whose current income or available cash is relatively modest.
The government consultation included a proposed deferral mechanism for people who cannot pay. However, the precise eligibility conditions and operation of support should be checked against the final rules before relying on a deferral.
If your property may sit near the £2 million threshold, it is sensible to retain relevant property information and monitor the valuation process rather than assuming that an online estate-agent estimate will determine your eventual HVCTS liability.
Is the High Value Council Tax Surcharge the same as a mansion tax?
“Mansion tax” is an informal description often used for taxes aimed at expensive residential property. The official name of this measure is the High Value Council Tax Surcharge.
| Tax / Charge | Typical Trigger | Recurring? |
|---|---|---|
| High Value Council Tax Surcharge | Ownership of an in-scope £2m+ residential property in England | Yes — annual |
| Council Tax | Occupation / liability for a domestic property | Yes — annual |
| Stamp Duty Land Tax | Qualifying property acquisition in England or Northern Ireland | No — transaction based |
| Capital Gains Tax | A taxable gain on disposal | No — event based |
| ATED | Certain high-value UK residential property held by companies | Potentially annual |
What should owners of high-value properties do now?
For most affected homeowners, the High Value Council Tax Surcharge will primarily be an additional annual cash-flow cost rather than a tax-planning opportunity.
The more significant issues arise where a property is close to one of the valuation thresholds, is owned through a company or other structure, forms part of a wider property portfolio, or where the owner may have difficulty funding the recurring charge.
Property owners should avoid making ownership changes purely to try to escape HVCTS without considering the wider consequences. Transferring property can potentially create other tax, legal, financing and transaction costs that are substantially greater than the surcharge itself.
A sensible approach is to understand whether the property is likely to fall within scope, keep appropriate valuation evidence and review the final legislation and guidance as implementation approaches.
High Value Council Tax Surcharge FAQs
What is the High Value Council Tax Surcharge?
The High Value Council Tax Surcharge, or HVCTS, is a new annual charge planned for owners of residential properties in England valued at £2 million or more. It is due to begin in April 2028 and will be payable in addition to existing Council Tax.
When does the High Value Council Tax Surcharge start?
The surcharge is due to take effect from 1 April 2028. Under the government's consultation design, first bills would be issued to liable owners in March 2028.
How much is the High Value Council Tax Surcharge?
The initial annual charges announced are £2,500 for properties valued from £2 million to £2.5 million; £3,500 from £2.5 million to £3.5 million; £5,000 from £3.5 million to £5 million; and £7,500 for properties valued over £5 million.
Does HVCTS apply throughout the UK?
No. The announced High Value Council Tax Surcharge covered by this guide applies to residential properties in England. Scotland, Wales and Northern Ireland have separate property-tax systems and are not within this HVCTS scheme.
Does Council Tax Band H automatically mean I will pay HVCTS?
No. Existing Council Tax bands do not determine HVCTS liability. The Valuation Office is carrying out a separate targeted valuation exercise using property values in 2026.
Who pays HVCTS — the owner or the tenant?
HVCTS is designed to be an owner liability. This differs from ordinary Council Tax, where the occupier is commonly liable. Detailed liability rules should be checked once the final legislation and guidance are available.
Will companies owning residential property have to pay?
Under the government's consultation design, if a company is the legal owner of a qualifying dwelling, the company would be liable for the surcharge. Complex structures should be reviewed against the final rules.
Can I appeal my High Value Council Tax Surcharge valuation?
The government consultation provides for processes through which taxpayers can challenge their HVCTS band or liability. The final appeal procedure should be checked once detailed rules are confirmed.
Will properties be revalued?
Yes. The announced framework provides for general HVCTS revaluations every five years, with the next revaluation after implementation expected in 2033. Certain property changes can also affect valuation treatment between general revaluations.
Is the High Value Council Tax Surcharge a mansion tax?
It is often described informally as a “mansion tax”, but the government's official name is the High Value Council Tax Surcharge (HVCTS). It is structured as an annual additional charge on owners of qualifying high-value residential properties.
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Speak to an Accountant →Last reviewed: October 2026. This guide reflects the announced High Value Council Tax Surcharge and the government's 2026 consultation. Detailed rules may change before implementation. This article is general information and is not individual tax or legal advice.