The UK government has officially launched a consultation on a new “mansion tax” style surcharge that could force owners of high-value homes in England to pay thousands of pounds more every year from April 2028.
The proposal, formally called the High Value Council Tax Surcharge, was first announced in Budget 2025 and is aimed at properties worth £2 million or more. Ministers say the current council tax system has become outdated because property bands have not been properly updated since 1992, creating situations where multimillion-pound homes can pay less council tax than ordinary family houses in other parts of England.
According to the consultation documents published by HM Treasury, the additional yearly charges could be structured into four bands. Homes worth between £2 million and £2.5 million may face a £2,500 annual surcharge. Properties valued between £2.5 million and £3.5 million could pay £3,500, while homes worth between £3.5 million and £5 million may be charged £5,000. Owners of properties valued above £5 million could face the highest surcharge of £7,500 every year.
Government says tax system has become unfair
Exchequer Secretary to the Treasury Daniel Tomlinson defended the reform, arguing that wealthy homeowners should contribute more toward local services.
He said a £10 million mansion in London’s Mayfair should not be paying less council tax than a normal family home in places such as Darlington or Blackpool. The government believes the surcharge will help rebalance England’s property tax system while generating around £430 million annually for councils and local services.
The consultation also reveals that affected properties would be revalued every five years to reflect changes in house prices, with the next scheduled revaluation expected in 2033.
Importantly, the surcharge would apply to property owners rather than simply the people living in the home. This means landlords, some leaseholders with long leases, and trustees could all potentially become liable for the charge.
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Deferral scheme and property market concerns
The government is also considering a deferral mechanism for homeowners who are “asset rich but cash poor.” Under early proposals, people with household incomes below £35,000 and savings under £16,000 may be allowed to delay payments until the property is sold.
Interest would still apply to deferred balances, and ministers are considering rates linked to the Bank of England base rate, HMRC interest rates or adult social care deferred payment schemes.
The consultation additionally proposes possible discounts or exemptions for charities, hospices, domestic violence refuges, social housing providers, Ministry of Defence properties and some farming businesses.
Property experts warn the new surcharge could weaken demand for luxury homes, especially in London where international buyers remain active. Some homeowners may also decide to sell expensive properties before the tax takes effect in 2028.
The consultation will remain open for eight weeks, with tax professionals, local authorities, legal experts and property industry groups invited to respond. Readers can view the official government announcement on GOV.UK.
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