Londoners face home inspections that will decide whether they owe thousands of pounds more a year under the new mansion tax. Agents working for the Valuation Office, which is part of HMRC, will visit properties to assess whether they are worth more than £2 million and therefore liable for the council tax levy. Homeowners who refuse would be committing a criminal offence and could be fined.
Inspectors will gather information on the size and style of a house, as well as the number of floors, bedrooms and bathrooms. Properties could be visited multiple times to ensure valuation data is up to date.
Tax details and impact on London
Former Chancellor Rachel Reeves announced in her Budget last year that properties worth more than £2 million face an annual charge of between £2,500 and £7,500 from 2028. London homeowners are expected to be hardest hit by the mansion tax, known officially as the high-value council tax surcharge. House prices in the capital are so high that even some flats are set to be caught by the levy, while some castles outside the city will escape.
Estimates show that households in just four boroughs - Kensington and Chelsea, Wandsworth, Richmond upon Thames and Westminster - will pay £270 million a year, half of what the Government predicts the tax will raise nationally.
Government and opposition responses
Treasury minister Dan Tomlinson confirmed that homeowners faced the Valuation Office contacting them to “arrange a visit”. He pointed to guidance that states failing to provide the “required information” to agents assessing properties for council tax is “a criminal matter that could result in a fine or, potentially, imprisonment if someone makes a false statement”.
The Government said property visits would take place by prior agreement with the owner. A spokesman added: “The public understands that we are addressing a longstanding unfairness, where a Band D home in Darlington pays more in council tax than a £10m mansion in Mayfair. The Valuation Office has extensive experience valuing domestic property, and will use a wide range of evidence to determine bandings.”
But shadow housing secretary Sir James Cleverly said: “This is sinister. Not content with ramping up taxes on hardworking families Andy Burnham and Angela Rayner will send tax inspectors to snoop around people’s homes. This is a massive expansion of state snooping and an invasion of privacy. Hard-working families and pensioners face the prospect of HMRC tax inspectors snooping around their gardens and inside their homes, to justify hiking taxes on them. Even homes which are below the new tax thresholds face these intrusive checks, with the threat of criminal prosecutions and fines if people refuse.”
Shadow chancellor Sir Mel Stride added: “We may have changed Prime Minister, but it’s the same old story with Labour: how can we raise taxes to pay for more benefits? Now they have chosen a sinister assault on civil liberties as their latest method. Burnham and Rayner are sending their council tax police to people’s homes so they can drag them into paying their new family homes tax. This is a tax on aspiration, on working hard and investing well, and Labour will stop at nothing to make as many people as possible liable for it.”
Council leaders' warning
The leaders of Richmond, Westminster, Kensington and Chelsea and Wandsworth councils last week wrote to new Chancellor John Healey to warn that their residents will be “disproportionately affected” by the proposals compared to other areas of the UK. They argued that it will hit pensioners who have lived in their homes for decades the hardest.
“A home is the centre of family life, not an untapped tax stream”, the leaders of the four boroughs wrote in a letter Mr Healey. “Our residents have often lived in the same home for decades. They have raised families there, built communities and lasting connections, and in many cases have seen the value of their homes rise even as their incomes have stayed flat or fallen. It is simply wrong to assume that everyone living in these homes is wealthy. Many are not, and under this proposal, some will be forced to sell the family home simply to meet the tax.”
