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Join Which? MoneyMansion tax – everything we know so far about the new charge
New forecasts suggest 165,000 households could be affected when the £2m ‘mansion tax’ comes into force in April 2028
With a background in financial journalism across national titles, Ruby loves helping people take control of their money and specialises in pensions, tax, banking and benefits.
Owners of properties worth more than £2m could soon face a new charge on top of council tax, with 165,000 households expected to be affected when the policy launches in April 2028.
Announced by the Chancellor, Rachel Reeves, in the November 2025 Budget, the High Value Council Tax Surcharge (HVCTS) will apply to homes in England valued at over £2m.
According to Office for Budget Responsibility (OBR) data, the number of homes affected is expected to rise to 167,000 by 2030-31.
Here Which? looks at what’s been confirmed so far about the mansion tax, including whether you can challenge the charge and if there are any ways to avoid it.
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What is the mansion tax – and how much will it be?
According to the government, less than 1% of properties will pay the high-value surcharge.
However, homeowners in London and the South East are set to bear most of the brunt of the new charge. Analysis from estate agents Hamptons found that around 50% of all properties in England valued at over £2m were in London and 85% in the South East.
If your property is valued at over £2m, your bill will be calculated using a sliding scale with four distinct bands:
| Threshold (£m) | Rate (£) |
|---|---|
| Between £2m - £2.5m | £2,500 |
| Between £2.5m - £3.5m | £3,500 |
| Between £3.5m - £5m | £5,000 |
| Over £5m | £7,500 |
Source: UK Government’s High Value Council Tax Surcharge Guidance
The high-value surcharge will only affect properties located in England, with homes in Wales and Northern Ireland not impacted. Social housing (council and housing association homes) will be exempt.
These charges will rise each year with CPI inflation from 2029‑30 onwards.
Scotland has separately announced plans to introduce two new higher council tax bands from April 2028. Properties worth between £1m and £2m would move into Band I, while those over £2m would fall into Band J. However, the final level of charges has not yet been confirmed.
- Find out more: council tax rates 2026-27: how does your bill compare?
How will valuations work?
The Valuation Office (VO), which became part of HMRC in April 2026, will be responsible for identifying properties that fall within scope of the surcharge.
To manage it, HMRC is recruiting approximately 1,000 new valuation officers. Treasury officials have confirmed that hiring will peak during 2027-28. While these roles cover various departments, roughly 33% are specifically allocated to the high-value surcharge.
VO chief executive Jonathan Russell told MPs that the agency will also employ professional valuers and support staff to identify properties in scope.
Although the charge applies to homes worth over £2m, the VO stated it will review properties valued at £1.5m and above to ensure no homes are missed.
Assessments will be based on 2026 market values, taking into account size, location, and property features. Most initial valuations will be desk-based, with officials using sales data and mapping tools to determine values rather than conducting physical inspections.
VO valuations are expected to start in late 2026 or early 2027, although HMRC has not confirmed exactly when areas will be reviewed. Revaluations will then follow every five years for properties above the threshold.
- Find out more: council tax calculator 2026-27
How will the new surcharge be collected?
The new charges will be collected by local councils alongside normal council tax, but extra money collected will go to central government and not directly to local authorities.
Due to this, it is expected that homeowners will get an annual bill alongside their council tax letters. The charge is intended for owners rather than occupiers, meaning rental tenants should not be responsible for the payment.
The exact way the charge is paid by those affected is still uncertain, although it will be discussed during the consultation period this year.
The OBR estimates 71,000 homes will fall into the first band, with another 79,000 valued between £2.5m and £5m. Approximately 15,000 homeowners will pay the highest rate of £7,500 a year, which is expected to raise an estimated £112.5m.
For homes valued between £2m and £5m, the OBR notes in its modelling that a third of owners would find that the tax takes up more than 10% of their income. Within this group, a third are expected to use their savings to pay the bill.
For households that have neither the income nor the savings to cover the cost, the OBR predicts that 16% will sell their property instead.
- Find out more: find out how much your home is worth
Will I be able to challenge the charge?
Homeowners will be able to challenge their surcharge valuation through a formal appeals process – likely to be similar to the council tax band appeal process. Details of this will be set out in new legislation before it is implemented next year.
The OBR estimates that 20% of homeowners – which is approximately 33,000 households – will formally appeal their property valuation to avoid the charge.
The success rate of these appeals is projected to sit around 40%. This would mean that around 13,200 properties would be successfully removed from the charge altogether or moved to a lower band.
Estate agents and other property experts have said affected homeowners should keep property records – such as purchases, improvements, and planning info to hand to potentially be used in the challenge process.
- Find out more: council tax bands
Will there be support available if I can’t pay?
The OBR has projected an overall non-payment rate of around 6%. The government is currently consulting on a support scheme to help those affected who are unable to pay.
According to the OBR, this is expected to include ‘deferral and support mechanisms’, which could allow homeowners with low incomes to delay their payments until the property is sold. The proposed scheme may also include specific exemptions for properties such as those left empty while an owner is in long-term care.
The government noted in its initial publication that it would ‘ensure a support scheme is in place for those who may struggle to pay the charge’.
It added: ‘It is important this scheme is targeted at those who need it most.’
As the measures are still part of a public consultation, the final eligibility rules and the exact nature of the support have not yet been confirmed.
- Find out more: what to do if you can't pay your mortgage
Can I devalue my home to avoid it?
Historically, homeowners have taken drastic steps to avoid property taxes. The 17th-century Hearth Tax led people to block fireplaces, while the 1696 Window Tax prompted owners to brick up windows.
However, trying to lower your home's value to avoid the tax is risky. You might make your house less attractive to buyers, but the VO could still decide it's worth over £2m based on its size and location.
Making big changes like knocking down walls can be expensive and often require legal permits. Selling off your driveway or garden could also trigger a bill for capital gains tax. So, simply put, don't go making any drastic alterations in a bid to avoid the high-value charge.
With the new system based on 2026 evaluations, there isn't much time left to act. However, it's best to wait for the government to confirm the final details of the scheme so you can make an informed decision – rather than a costly mistake.
- Find out more: 7 common mistakes when selling your home
