High Value Council Tax Surcharge
England
The High Value Council Tax Surcharge (HVCTS) is an annual charge on owners of residential property in England worth £2 million or more, payable from 1 April 2028 on top of existing council tax. The government announced it at the Autumn Budget 2025 and is legislating for it in section 3 of the Finance Bill 2026-27, according to the government’s policy paper. It is often called the “mansion tax”.
How much the surcharge costs
Properties above the threshold are placed in one of four value bands, each with a fixed annual charge. The charge is £2,500 for a property worth £2 million to £2.5 million, £3,500 for £2.5 million to £3.5 million, £5,000 for £3.5 million to £5 million, and £7,500 above £5 million. The government factsheet confirms the charges will rise with CPI inflation each year from 2029-30. Unlike an ordinary council tax band, the amount is the same in every council area in England.
Who pays: the owner, not the tenant
In a standard let of a whole property, the tenant usually pays council tax as the resident. The surcharge works differently because it is a charge on the owner, so a landlord with a let property worth £2 million or more pays it even though the tenant pays the ordinary council tax bill. Businesses and other organisations that own high-value residential property are liable too, so holding a property in a limited company does not take it out of scope.
From working with self-managing landlords across the UK, we expect few portfolios to be affected, because the threshold is more than seven times the UK average house price of £273,000 (ONS, August 2026). Landlords with prime London property or large converted houses should check where their properties sit and treat the surcharge as a fixed holding cost when setting rent and modelling rental yield.
How properties are valued and banded
The Valuation Office Agency is running a targeted valuation exercise to identify properties worth £2 million or more at 2026 values and place them in a band. Councils will collect the surcharge on behalf of central government alongside existing council tax. Owners can challenge a banding decision or a bill, and appeal to the Valuation Tribunal for England if they disagree with the outcome. Unpaid charges are enforced in the same way as council tax, through a liability order from the magistrates’ court.
Deferrals, discounts and exemptions
A deferral scheme will let owners who meet national criteria, such as those on lower incomes or facing a temporary change in circumstances, delay payment until the property changes hands. Budget 2026 confirmed that deferrals, discounts and exemptions will apply from 1 April 2028, but the detailed rules will be set in secondary legislation due in 2027. Landlords should not assume a let property qualifies for any relief until those rules are published.
Scotland, Wales and Northern Ireland
The surcharge applies in England only. It does not apply in Wales, Scotland or Northern Ireland, which run their own local tax systems, although Scotland has separately announced two new higher council tax bands from April 2028.
August’s property insights show the council tax band for every property in a portfolio, and expenses tracking records the running costs carried on each property, so the effect of a new annual charge on net return is visible in one place. For a fuller picture of how council tax works on let property, see our guide to bills and council tax in a rental property.
Frequently asked questions
Do landlords pay the High Value Council Tax Surcharge on rented property?
Yes. The surcharge is a charge on the owner of residential property in England worth £2 million or more, so it applies to let property as well as to homes the owner lives in. The tenant remains responsible for ordinary council tax under a standard let, but the surcharge sits with the landlord.
When does the mansion tax start?
The surcharge takes effect on 1 April 2028. Councils will bill it alongside council tax, and the charges rise with CPI inflation from 2029-30.
Is the surcharge based on the council tax band?
No. Council tax bands in England still use 1991 values, while the surcharge uses a separate Valuation Office Agency valuation at 2026 values. A Band H property is not automatically in scope, and the surcharge amounts are fixed nationally rather than set by each council.
