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What is the mansion tax, who will pay it and how will it work in practice? We’ve asked an expert to explain how the High Value Council Tax Surcharge will operate, how much it will cost, and how properties will be valued.
KEY INFORMATION
The mansion tax – or High Value Council Tax Surcharge to give it its proper title – will apply to residential properties in England valued at £2 million or more, from April 2028. It was announced in the Budget 2025.
Homes that meet this threshold will incur an additional annual charge, ranging from £2,500 to £7,500, depending on the property’s value band.
The mansion tax will apply to homeowners with properties valued at £2 million or more in April 2026, and be collected alongside council tax from April 2028. However, unlike with council tax, the money will go to the Treasury, not local authorities.
On 19 May 2026, the Government launched a consultation on how the mansion tax could work. The consultation closed on 14 July 2026, and the government published its response on 28 October 2026. This confirmed more detail about who can defer paying, which properties will qualify for exemptions or discounts, and how homeowners can challenge their property’s band. Read on to find out how these arrangements could affect you.
If you own residential property in England valued at £2 million or more, the rate of mansion tax you’ll pay will be set by a sliding scale.
There will be four price bands with the surcharge rising from £2,500 for a property valued in the lowest £2 million to £2.5 million band, to £7,500 for a property valued in the highest band of £5 million or more.
| Threshold (£m) | Rate (£) |
| £2-2.5 | £2,500 |
| £2.5-3.5 | £3,500 |
| £3.5-5 | £5,000 |
| £5+ | £7,500 |
These are the initial annual charges. They will increase in line with CPI inflation from 2029–30.
Yes, if you qualify. The government has confirmed a deferral scheme for households meeting at least one of these criteria:
Deferral delays payment until ownership of the property changes, although you can pay it sooner. Interest will apply, although the rate and detailed arrangements are still to be set. Read the government’s consultation response for more information.
Yes. Confirmed exemptions include qualifying care accommodation, purpose-built student halls and military barracks. Discounts will also apply to specified properties, including registered social housing and working farmhouses. The full definitions and conditions for exemptions and discounts will be set out in regulations.
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The mansion tax will be paid by the person who owns the property, not the occupiers.
The government says fewer than 1% of residential properties in England are expected to meet the £2 million threshold.
Homeowners in London and the South East will bear most of the brunt of the new property tax. Around 50% of all properties in England valued at over £2 million are in London, and 85% are in London and the South East combined, Hamptons analysis shows.
Guidance on the High Value Council Tax Surcharge issued by the government says: “The Valuation Office will conduct a targeted valuation exercise to identify properties above £2 million and therefore in scope. Fewer than 1% of properties in England are expected to be above the £2 million threshold. Revaluations will be conducted every five years.”
HMRC is drawing up a draft list of properties that could be affected, using information including planning records, publicly available property sale prices and data already held by the Valuation Office.
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, surveyors can often rely on multiple comparable sales to form an informed opinion.
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.
This makes the quality of the underlying property information and professional judgement particularly important. It also means homeowners may disagree with the band their property is placed in. Jump to Can I challenge my mansion tax valuation?
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Currently, most tax-related valuations are commissioned and paid for by the individual taxpayer, and are carried out by a valuation surveyor. Examples include:
The Valuation Office 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 Valuation Office will undertake the valuations, with homeowners able to challenge them.
Paula Higgins, CEO of the HomeOwners Alliance, says:
“If you’re considering challenging the mansion tax for your property you might want to get a valuation survey now to help argue your case. By getting your own property valuation, you’ll have an expert opinion on the value of your property. Then, if the valuation you receive from the Valuation Office is higher, you’ll be in a good position to start your challenge.”
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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 Valuation Surveyor, and HMRC can check the valuation used.
The initial mansion tax valuations will be based on April 2026 market values. The annual charges will increase with CPI inflation from 2029–30. The property value thresholds will not automatically rise each year: decisions about changing them will be taken alongside revaluations.
Revaluations will take place every five years, with the next in 2033.
From April 2028, the Valuation Office will also update its records when homes are built or altered. If you improve your home, for example by adding an extension, your band won’t usually change until you sell, split it into separate homes, merge it with another property, or the next revaluation takes place.
There are a number of different ways the mansion tax may affect homeowners:
The mansion tax could push down property prices around each band boundary. However, as this will affect the higher end of the market, it’s unlikely to have an impact on the majority of buyers and sellers.
Some homeowners may choose to downsize to avoid paying the mansion tax. However, the high cost of stamp duty will put some potential movers off.
However, given that this only affects properties worth £2 million or more, it’s not expected to have a widespread impact.
Use our stamp duty calculator to help you work out how much stamp duty you will need to pay
The introduction of a mansion tax could see owners of expensive second homes facing a double whammy of extra council tax charges in the form of:
For more detailed information, read our guide Second home council tax explained.
A separate 100% mansion tax premium will apply to homes that have been substantially unfurnished and unoccupied for at least 12 months. This will double the surcharge for affected properties. It does not apply to every second home simply because it is not the owner’s main residence.
When the tax was announced in November 2025, the government said the mansion tax would be a “significant reform to improve fairness within England’s property tax system”. It also said: “Under the current system, the average band D charge for a typical family home across England is £2,280. That is £250 more per year than a £10 million property in Mayfair, based on the band H charge in the City of Westminster, currently pays.”
There has been a mixed response from the public to the announcement of the mansion tax, and criticism from within the industry of it being unfair.
A fifth of the UK public (21%) don’t think the mansion tax is fair, a poll from mortgage lender Together shows. The highest proportion of those viewing the mansion tax as unfair were in Bristol (27%), London (23%) and Plymouth (23%).
However, while a minority oppose the mansion tax, the figures show that many more people in the UK support it.
To get an idea of your property’s current value, you can use our instant valuation tool:
Find out how much your house is worth with our online tool.
With draft bands set to be published in autumn 2027, one step homeowners can take to prepare is to book a valuation survey.
This will give you an expert opinion on the value of your home, putting you in a strong position to challenge a mansion tax valuation if you believe it to be wrong. Use our free tool to get instant estimates from qualified surveyors working in your area.
We will continue monitoring announcements as further details are released.
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
The mansion tax is a new property tax, officially called the High Value Council Tax Surcharge. It will apply from April 2028 to homes in England valued at £2 million or more and will cost £2,500-£7,500 per year, depending on property value. Find more information in our guide Mansion Tax: How the “High Value Council Tax Surcharge” will work.
How much the mansion tax will cost depends on the property’s value band. Initial annual charges range from £2,500 for properties in England valued between £2m-£2.5m up to £7,500 for homes worth £5 million or more. Charges will rise with CPI inflation from 2029–30.
There is currently no official UK mansion tax calculator, but homeowners can estimate costs using the published value bands and an approximate property valuation.
Yes. Homeowners will be able to challenge mansion tax valuations if they believe their property has been placed in the wrong band. Homeowners will be told in autumn 2027 whether their property will be subject to the tax, ahead of it starting in April 2028.
A mansion tax, officially called the High Value Council Tax Surcharge, was announced by then-Chancellor Rachel Reeves in the Budget on 26 November 2025.
The government estimates it will raise around £400 million a year from 2028–29 to support local government services.
The Valuation Office, part of HMRC, will determine the bands using automated valuation models alongside professional valuer judgement. Most properties can be assessed using existing information. In limited cases, a visit may be needed by prior agreement.
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 VO to carry out their own valuation.
The original mansion tax plan was reported to have been to target homes worth over £1.5 million. But this threshold was increased after some MPs warned that setting it at £1.5 million would mean many Labour voters, including public sector professionals, would have been hit by the levy, the Financial Times reported.
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