The government has announced the first steps in a council tax shake-up designed to boost Treasury revenues by £430 million per year. Council tax has remained unchanged for decades and has not been adjusted as property values have increased, meaning some households in larger properties pay far less than others.
Consultation on High Value Surcharge
An eight-week consultation has been launched on the details of the new High Value Council Tax Surcharge, which the government says aims to make the system fairer for households. The consultation will seek views on the scope of the surcharge, the billing process, how the system will be run, and how people can appeal.
Impact on Most Expensive Properties
Under proposals announced at Budget 2025, those with the top 1% most valuable properties will be required to pay their fair share. The government states that the money raised will help fund vital local government services and implement significant reform to improve fairness within England's property tax system.
According to the government, '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.'
The consultation outlines details for the new charge on owners of residential property in England worth £2 million and above, including how properties will be identified, valued, and placed in a band for the surcharge.
Government Statement
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.'
Revaluation and Timeline
Revaluations of properties worth more than £2 million will be carried out every five years, with the next revaluation in 2033, ensuring 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 into effect from April 2028 and is expected to raise approximately £430 million per year to support funding for local government services.
