Find the best estate agent near you Start here
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 are likely to 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 above £2 million, from April 2028. It was announced in the Budget 2025.
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.
The mansion tax will apply to homeowners with properties valued at more than £2 million in 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, the Government launched a consultation on how the mansion tax could work. The consultation closed on 14 July 2026, and the Government is now considering the responses.
If you own residential property in England valued at more than £2 million, 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 |
Possibly. The government has consulted on this, along with the details of reliefs and exemptions, support mechanisms and how the appeals system will work.
The OBR’s report says in its costings it “assumes that some current council tax exemptions will apply and that there will be a deferral scheme for those unable to pay immediately.”
Get instant quotes from Chartered Surveyors in your local area.
The mansion tax will be paid by the person who owns the property, not the occupiers.
The Office for Budget Responsibility estimates around 165,000 households will be hit by the mansion tax.
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.
HMRC chief executive John-Paul Marks has said home visits would only be used as a “last resort” and with the homeowner’s agreement. He said visits would normally be requested by the homeowner where additional evidence was needed to establish the property’s value, reports The Times.
Valuation Office officers already carry out home visits in some cases where homeowners challenge their council tax band.
HMRC is also bringing an extra 300 staff into its valuation department to help deal with the mansion tax, including carrying out checks and handling appeals.
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.
Plus, desktop valuations have a tendency to overvalue properties because of the “mathematical average it uses”, according to The Times.
This has led to concerns the whole process will be bogged down with mass appeals from homeowners. Jump to Can I challenge my mansion tax valuation?
Get instant quotes from Chartered Surveyors in your local area.
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:
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 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 VOA is higher, you’ll be in a good position to start your challenge.”
Get instant quotes from Chartered Surveyors in your local area.
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 although the VOA can challenge valuations, it rarely does.
The initial mansion tax valuations are expected to 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) has not yet been confirmed and further details are expected following the government’s consultation.
There are a number of different ways the mansion tax may affect homeowners:
The mansion tax is likely to 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 over £2 million, 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.
The government says the mansion tax will be a “significant reform to improve fairness within England’s property tax system”. It also says: “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 homeowners expected to be told in autumn 2027 whether their property will be subject to the mansion tax, one step you 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 above £2 million 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. Annual charges range from £2,500 for properties in England valued between £2m-£2.5m up to £7,500 for homes worth over £5m.
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 are expected to 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.
According to the Office for Budget Responsibility, the mansion tax is expected to raise £0.4 billion in 2029-30.
HMRC says professional valuers will use a range of information to make banding decisions. In very limited circumstances, a home visit may be needed. HMRC chief executive John-Paul Marks has said visits would be a “last resort” and with the homeowner’s 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.
HomeOwners Alliance Ltd is registered in England, company number 07861605. Information provided on HomeOwners Alliance is not intended as a recommendation or financial advice.
HomeOwners Alliance Ltd is an Introducer Appointed Representative of Mortgage Advice Bureau (Derby) Limited which is authorised and regulated by the Financial Conduct Authority.
If you take out a mortgage or protection product through Mortgage Advice Bureau, they pay us a referral fee of 25%. You are not obliged to use their services.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of LifeSearch Limited, an Appointed Representative of LifeSearch Partners Ltd, authorised and regulated by the Financial Conduct Authority. (FRN: 656479).
Independent Financial Adviser service is provided by Unbiased, who match you to a fully regulated, independent financial adviser, with no charge to you for the referral.
HomeOwners Alliance Ltd is an Introducer Appointed Representative (IAR) of Fluent Money Limited, which is authorised and regulated by the Financial Conduct Authority. Calls may be monitored/recorded.
