Chancellor Rachel Reeves has unveiled a significant new property tax that will affect owners of high-value homes across England. From April 2028, properties valued at £2 million or more in 2026 will face an additional annual council tax surcharge.
How the New Property Surcharge Will Work
The government's Valuation Office Agency will determine property values next year, creating four distinct price bands for the surcharge. The additional payments will range from £2,500 per year for homes valued between £2 million and £2.5 million, rising progressively to £7,500 annually for properties in the highest band valued at £5 million and above.
This measure represents an extra financial burden on top of existing council tax payments. While often referred to as a 'mansion tax,' the terminology might stretch definitions in more expensive regions of the country where £2 million properties may not constitute traditional mansions.
Timeline and Implementation Details
The key date for homeowners to note is April 2028, when the surcharge becomes effective. However, the crucial valuation assessment will occur two years earlier in 2026, establishing which properties qualify for the additional charges.
The four-tier banding system ensures that the tax burden increases with property value, creating a progressive structure that demands higher contributions from owners of the most valuable residential properties in England.
Potential Impact on Property Market
This new financial consideration could influence decision-making for current and prospective owners of high-value properties. The additional annual cost may affect buying and selling decisions, particularly for those considering properties near the £2 million threshold.
The announcement marks one of the most significant changes to property taxation in recent years, specifically targeting the premium end of the housing market. Homeowners falling within these valuation brackets should prepare for the additional financial commitment coming into effect in 2028.
