The government plans a High Value Council Tax Surcharge, often called the mansion tax, on residential property in England worth £2 million or more, starting from April 2028. The announced charges begin at £2,500 a year and rise to £7,500 a year for properties worth £5 million or more. It was announced at Budget 2025 and is at consultation stage: it is not yet law, and the detail can still change. The announcement is on GOV.UK: fairer taxes for high value homes. Correct as at 12 September 2026; the surcharge is a planned measure, not a current tax.
What has actually been announced?
A recurring annual charge on English homes worth £2 million and above, collected alongside council tax, from April 2028. The consultation (19 May to 14 July 2026) published the full proposed banding: £2,500 a year for properties valued between £2 million and £2.5 million, £3,500 between £2.5 million and £3.5 million, £5,000 between £3.5 million and £5 million, and £7,500 above £5 million, all in 2026 property values, with the owner rather than the occupier liable.
| Property value (England) | Planned annual surcharge | Status |
|---|---|---|
| £2 million to £2.5 million | £2,500 a year | Proposed; planned from April 2028 |
| £2.5 million to £3.5 million | £3,500 a year | Proposed; planned from April 2028 |
| £3.5 million to £5 million | £5,000 a year | Proposed; planned from April 2028 |
| Over £5 million | £7,500 a year | Proposed; planned from April 2028 |
What is not yet decided
The consultation covers the working detail: the final design following the consultation, which ran from 19 May to 14 July 2026 and proposed that the Valuation Office Agency values properties against 2026 levels. Still open: the precise valuation and appeal machinery, reliefs and payment support, how the charge interacts with existing council tax, and anything the government changes in response to consultation replies. The proposals are government policy under consultation, not enacted law. Until the legislation exists, any confident statement about those mechanics is speculation, and planning around speculation is usually wasted money.
Because the measure is not yet law, it could be amended, delayed or dropped. Announced-but-unlegislated taxes have changed shape before; the agricultural and business relief reforms announced in 2024 were materially revised before taking effect in 2026.
Who should pay attention now?
Owners of London homes around or above the £2 million mark, which in practice includes a large share of prime and much of central London housing, and anyone holding high value property inside an estate plan. If your home is worth £2 million or more, the surcharge would sit alongside the inheritance tax picture: the £2 million threshold is also where the residence nil-rate band taper starts, so the same houses are exposed on two fronts. Our guide to the residence nil-rate band explains that interaction.
What to do now
Nothing dramatic. Selling or restructuring ownership to escape a tax that does not exist yet, with unknown rules, is premature. What is sensible: know your property's realistic current value rather than an old guess, factor a possible £2,500 to £7,500 annual cost into long term plans if you are near the thresholds, and fold the question into your next estate planning review rather than treating it separately. We track the consultation as part of tax planning and inheritance tax planning work for clients with high value homes, and will update this note as the rules firm up.
Frequently Asked Questions
No. The High Value Council Tax Surcharge was announced at Budget 2025 and is planned from April 2028. It is at consultation stage and has not been legislated, so the details can still change.
The announced figures start at £2,500 a year for homes worth £2 million or more, rising to £7,500 a year for homes worth £5 million or more. The consultation proposed four flat bands: £2,500, £3,500, £5,000 and £7,500 a year, stepping up at £2.5 million, £3.5 million and £5 million of value in 2026 terms.
The announced measure covers residential property in England. Council tax is devolved, so Scotland and Wales set their own rules.
Acting ahead of an unlegislated tax is rarely sensible, and moving a home into another structure has real costs of its own, including stamp duty and capital gains tax. The better move is to keep a current valuation, watch the consultation outcome, and take advice once the rules are actually written.
Talk to us if your home is near the threshold
If your property sits around the £2 million mark and you want it looked at within your wider tax and estate position, speak to Zaman Khan, Senior Manager. The first conversation covers your current valuation, the residence nil-rate band taper, and what is worth doing now versus after the consultation reports. Call 020 8554 2135 or email info@visionconsulting.co.uk, or get in touch via our contact page.
By the Vision Consulting team.
This is general information, not advice. Your position depends on your circumstances.