High Value Council Tax Surcharge (HVCTS)
In the 2025 Budget the government announced it would introduce a a new charge on owners of residential property in England worth £2 million or more - the High Value Council Tax Supplement (HVCTS) - from April 2028.
In the 2025 Budget, the government announced it would introduce a new charge on owners of residential properties in England worth £2 million or more – the High Value Council Tax Surcharge – from April 2028. The new charge has sometimes been referred to as a ‘mansion tax’ in the press.
How would the tax work?This charge would be levied on property owners, rather than occupiers, and would be in addition to council tax.
It would be based on updated valuations to identify properties worth £2 million or more in 2026. The surcharge would begin at £2,500 a year and would increase for more expensive properties (up to £7,500 a year for those valued at over £5 million).
The government estimates that the HVCTS could raise £400 million in 2028/29.
Consultation on details of the schemeThe government launched a consultation on the design of the HVCTS on 19 May 2026. The consultation closed on 14 July 2026. The government has not published any details of the outcome of this consultation, though it plans to include the main provisions for the HVCTS in a future Finance Bill.
The consultation sought views on who would be liable for the tax in different ownership situations (for example, leaseholders and freeholders) and proposed exemptions for several types of accommodation, including student halls of residence, military and diplomatic accommodation, and social housing.
It also proposed a ‘deferral mechanism’, whereby those who do not have the income to pay the HVCTS each year can instead defer their payments until they sell the property, based on a similar mechanism for paying for adult social care.