Mansion tax valuations: How the new High Value Property Surcharge will be assessed

How will houses be valued for mansion tax? We've asked the experts to explain how the High Value Council Tax Surcharge will work and in particular how mansion tax valuations might be decided.

What is the mansion tax?

In the Budget 2025 it was announced that from April 2028, the new mansion tax – or High Value Council Tax Surcharge to give it its proper title – will apply to residential properties in England valued above £2 million.

Homes that fall above this threshold will incur an additional annual charge, ranging from £2,500 to £7,500, depending on the property’s value band.

So the question on many homeowners’ minds is: “How will the mansion tax be valued?“

How much is the mansion tax?

If you own a property in England valued at over £2 million, the amount of mansion tax you’ll pay each year will depend on which house value band it falls into:

High Value Council Tax Surcharge property bands

Threshold (£m)	Rate (£)
£2-2.5	£2,500
£2.5-3.5	£3,500
£3.5-5	£5,000
£5+	£7,500

How will mansion tax valuations work?

A property’s value is influenced by numerous factors including location, size, condition, layout, and overall market appeal.

Values naturally fluctuate and may change quickly if new comparable evidence emerges, such as a recent sale of a similar property nearby.

For typical residential streets, Chartered Surveyors can often rely on multiple comparable sales to form an informed opinion.

• For example, a Victorian terrace may have several nearly identical homes on nearby streets, allowing logical adjustments based on size, condition, or features.

High-value properties in the UK, however, are a different story. The types of homes targeted by the mansion tax are often unique, with little or no directly comparable evidence. On streets where every house is distinct, Surveyors cannot easily rely on standard comparisons.

Surveyors often say: “Valuation is neither an art nor a science.” This becomes even truer for high-value homes, where comparable evidence is limited. Professional judgement becomes crucial, and valuations must be well researched and clearly presented.

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Who will carry out mansion tax valuations?

When the mansion tax was announced in the UK’s November 2025 Budget, the supporting documents indicated that the implementation details were still under consideration.

Currently, most tax-related valuations are commissioned and paid for by the individual taxpayer, who is legally responsible for the property and carried out by a valuation surveyor. Examples include:

• Inheritance tax valuations required for probate.
• Capital gains tax valuations when transferring property ownership into company names, for example.

The Valuation Office Agency (VOA) has the right to challenge these valuations but rarely does so when the reports are well-evidenced.

However, the motivation behind seeking valuations for the mansion tax is different. Unlike inheritance tax or capital gains tax, where the taxpayer is proactively undertaking an action, mansion tax valuations arise from a compulsory requirement to pay tax, not from a transaction the owner chooses to pursue.

The working assumption at the moment is that the Valuation Office Agency will undertake the valuations, with taxpayers having the right to challenge them.

Mansion tax compared with ATED

A similar tax exists: Annual Tax on Enveloped Dwellings (ATED), charged on certain properties owned by companies or partnerships. ATED also uses property value bands and requires revaluation every five years. Taxpayers may appoint their own Chartered Valuation Surveyor, and although the VOA can challenge valuations, it rarely does.

However, the mansion tax differs because:

• Individuals may be less willing to pay for valuations out of post-tax income.
• The number and complexity of required valuations will be far greater.
• High-value homes create more room for valuation discrepancies.

Will homeowners be able to choose their own surveyor?

Possibly. The VOA could and likely will attempt to conduct valuations themselves, but the last mass valuation exercises took place in 1991 (England & Scotland) and 2003 (Wales).

High-value property valuations are more complex, and the volume of expected challenges may push the Government to allow homeowners to appoint their own Chartered Valuation Surveyor – as is done for ATED and other taxes.

However, the Government may worry that owners could commission multiple valuations and submit the one most favourable to them. Although this concern hasn’t stopped similar practices under other tax regimes, it may influence the rules.

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When will the mansion tax valuations take place?

• The valuations are likely to assess properties as of April 2026, though that’s still to be confirmed. The tax then won’t apply until April 2028.
• This will mean a lot of valuations to take place over two years at the very longest.
• If the Valuation Office Agency is to undertake these, they’ll need additional budgeting but for a limited period only. This can prove difficult as if they do not have sufficient in-house experience, it may be challenging to secure fixed-term contracts or a hire-and-fire policy that would enable short-term work to be undertaken at this sort of scale – especially given what is at stake.
• We can also expect that the VOA will have to handle a number of challenges. Jump to Can I challenge my mansion tax valuation?

Will the surveyor need to inspect the property?

• Yes, where the value is near the boundary of a band – either the top or bottom – an inspection becomes extremely important. Desktop or drive-by valuations are risky, particularly where substantial tax liability depends on accuracy.
• If a valuation is clearly within a band (e.g. due to a recent sale), a desktop valuation may be accepted.
• However, it’s unclear whether HMRC will record the actual valuation figure or simply assign the property to a band. This matters for future revaluations. Properties in scope will be revalued every five years, with the first revaluation expected in 2033.

How will future mansion tax valuations work?

The initial mansion tax valuations will be based on April 2026 market values, and the cash thresholds for the bands will be uprated annually in line with consumer price inflation rather than being frozen.

How exactly the five-year revaluation will be carried out (for example, whether it will use a full valuation exercise, modelling, or specific data sources such as Land Registry evidence) is due to be set out through the government’s consultation and subsequent legislation, so the method is not yet confirmed.

What happens if a property isn’t valued?

As the saying goes, nothing is certain except death and taxes. If the Government believes the mansion tax may be payable, HMRC will likely instruct the VOA to carry out their own valuation. There are however significant risks with this being done.

Can I challenge my mansion tax valuation?

If the VOA undertakes mansion tax valuations, challenges are almost certain. Although the VOA has expertise, it does not routinely value properties in this market segment, increasing the risk of errors.

Given the high stakes, and the financial ability of many affected owners to challenge decisions, this could create significant difficulties for the Government.

While a process for appeals is almost certain, the Government may ultimately prefer that homeowners obtain their own valuations, reducing pressure on the VOA.

How should homeowners prepare for mansion tax valuations?

As April 2026 approaches, further Government guidance will be published. In the meantime:

• Consider whether planned improvements that add value, such as a new kitchen or an extension, might push your property into a higher band.
• Think about timing. Improvements made after the valuation date (likely April 2026) may not affect your mansion tax liability for the next five years.

The details will be important, and we will continue monitoring announcements as they are released.

Is there a mansion tax calculator?

While there is currently no official mansion tax calculator provided by the Government, homeowners can estimate their liability by using the published bands and an indicative property valuation.

Once guidance is finalised, tools for calculating mansion tax liability are likely to emerge.

With thanks to Dan Knowles FRICS, Director and RICS Registered Valuer at Websters Surveyors

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