The Scottish Government has launched a consultation on plans to introduce two new Council Tax bands for homes worth more than £1 million, potentially increasing annual bills by up to £3,600 for the most expensive properties. The proposals, described as a 'mansion tax', aim to make wealthy homeowners contribute more to local public services.
New Tax Bands for High-Value Properties
The proposed changes would create a new Band I for homes valued between £1 million and £2 million, and a new Band J for properties worth over £2 million. These bands would affect fewer than one per cent of properties in Scotland, according to the Scottish Government. If approved by the Scottish Parliament, the new rates would come into force from April 1, 2028.
Illustrative rates published in the consultation suggest that owners of properties in Band I would pay around £720 more per year than the current highest Band H charge. For Band J properties, the annual Council Tax bill could be approximately £3,600 higher than Band H.
Revenue for Local Services
The Scottish Government stated that the additional revenue raised from these new bands would be retained in full by local councils to fund local public services. Deputy First Minister and Cabinet Secretary for Finance Jenny Gilruth said: "Our approach to tax is based on fairness - asking the wealthiest among us to contribute a bit more. As it stands, some multi-million pound properties have Council Tax bills that are not materially different from those faced by people living in far more modest homes."
Gilruth added: "Our progressive approach to taxation helps to target investment in economic growth, deliver public services and support cost of living measures not available elsewhere in the UK, such as free tuition, free prescriptions and our plans for a £2 bus fare cap across Scotland. Additional revenue raised through these new Council Tax bands will be retained in full by local government to support the local services communities rely on."
Consultation and Implementation
The consultation, which closes on August 24, seeks views on the proposed rates before final rates are set in legislation. To introduce the new bands, the Scottish Government will bring forward primary legislation. If approved, Scottish Assessors will carry out a targeted revaluation of all residential properties estimated to be worth more than £1 million, using property values as of April 1, 2026.
No other homes in Scotland would be revalued as part of the proposals. All remaining properties will continue to use the existing 1991 valuation basis for Council Tax. Existing Council Tax discounts, exemptions and the Council Tax Reduction Scheme would continue to apply to the new bands.
The Scottish Government confirmed that Band I would apply to homes with an estimated market value between £1 million and £2 million, while Band J would cover properties worth more than £2 million. People can respond to the consultation until August 24 before the Scottish Government considers responses and sets the final rates in legislation.
