What is the ‘mansion tax’?
The High Value Council Tax Surcharge, or HVCTS) announced in the Autumn budget is a new tax on high value residential properties in England. It will be an annual charge based on the value of houses valued at over £2 million and scaled upwards according to value. It will be charged in bands relative to the assessed valuation of the dwelling:
£2,500 a year for dwellings valued between £2million and £2.5million
£3,500 a year for dwellings valued between $2.5million and £3.5million
£5,000 a year for dwellings valued between £3.5million and £5million
£7,500 a year for dwellings valued in excess of £5million
Who is liable?
It will be the owner/s (rather than the occupier) who will be liable for the charge
When will it be imposed?
The tax takes effect from April 2028. It is to be collected as a supplement to Council Tax, but then paid on to Government.
How will the property values be assessed?
The Valuation Office Agency is charged with assessing values (as at April 2026) between now and April 2028. It is unclear what methodology they will use, beyond sales data already available; there has been talk of their using Google Earth or drones, but a consultation in 2026 will add further detail on revaluations and deferments. The Homeowners Alliance is understandably sceptical about whether the ‘revaluation needed….. can be delivered cleanly and on time’.
Will there be a right of appeal?
Yes – but appeals are likely to take a considerable time to resolve. Predictably (as the FT suggests) the VOA will be facing a well-motivated and well-off group of home owners – many of whose properties will not have been sold for decades. The VOA is already overstretched (the FT reports that a staff of 4,280 people, is already dealing with a backlog of Council Tax disputes and challenges to business rate decisions which had risen by 44% in 2023-24 – the most recently available figures – from 9,130 in 2022-23 to 13,180).
The charge will be payable pending the outcome of an appeal; as Savills have pointed out, it remains unclear as to how successful appeals will be repaid (as the tax, payable to the Local Authority as a supplement to Council Tax will have been forwarded to the Government).
With our unique data base of sales dating back for over 20 years (and our finger constantly on the pulse of sale values), we look forward to offering our clients a valuation (and dispute resolution) service when the time comes.
