Fairer taxes for high-value homes

• Government launches next step in reforms that will tackle historic unfairness and see high value properties pay their fair share
• New surcharge on the top 1% of most valuable properties will put money into communities and local services across the country.
• First announced at Budget 2025, the reforms will rebalance the system which has been unchanged since 1992.

The government has launched a consultation today (May 19) on the details of the new High Value Council Tax Surcharge to make the system fairer for households across the country.

The move, announced at Budget 2025, will ensure those with the 1% most valuable properties pay their fair share – helping to fund vital local government services and implementing a significant reform to improve fairness within England’s property tax system.

Council tax has remained untouched for decades and has not been readjusted as property values increase. That means that under this flawed system, a multimillion pound mansion could be paying less council tax than a small family home.

Today the government is setting out the details for the new charge on owners of residential property in England worth £2 million and above to address this unfairness. The consultation also outlines how properties will be identified, valued and placed in a band for the surcharge.

Dan Tomlinson, Exchequer Secretary to the Treasury, said:

“A £10 million mansion in Mayfair should not be paying less council tax than an ordinary family home in Darlington or Blackpool.

“This change tackles historic unfairness, so that those with the most valuable properties pay their fair share, helping to rebalance the system and putting money back into communities up and down the country.”

Revaluations of properties worth more than £2 million will be carried out every five years, with the next revaluation being held in 2033, ensuring that the tax remains fair and up to date with house prices.

The consultation also sets out proposals for taxpayers to review the valuation of their property. The charge, which will affect less than 1% of properties, will come in from April 2028 and is expected to raise around £430 million per year to support funding for local government services.

Further information

The consultation launched today will run for eight weeks and taxpayers, local government, tax experts, legal professionals and those in the property industry are encouraged to respond.

The consultation will specifically seek views on:

·       the design of the tax surcharge

·       proposed scope of the tax surcharge

·       a deferral mechanism, to support those who cannot pay

·       the billing process

·       the proposed appeals process

·       administration and enforcement mechanisms