Policy paper

Additional Council Tax charge on high-value properties

Published 28 October 2026

Who is likely to be affected 

Owners of residential property in England worth £2 million or above.

General description of the measure 

The High Value Council Tax Surcharge (HVCTS) is a new annual charge on owners of residential property in England worth £2 million or above.

The measure will come into force from April 2028. 

The Valuation Office (VO) will conduct a targeted valuation exercise to identify properties in scope of the charge, and will place properties into one of four bands:

	Band (millions)	Charge
1	£2.0 - £2.5	£2,500
2	£2.5 - £3.5	£3,500
3	£3.5 - £5.0	£5,000
4	£5+	£7,500

Local authorities will collect the charge on behalf of central government, alongside existing Council Tax.

Policy objective 

The HVCTS is designed to help address unfairness in the Council Tax system.

Under the current system, a band D property in Darlington or Blackpool today, worth around £400,000, pays £2,400 to £2,600 annually. A band H property in Mayfair valued at £10 million pays around £2,100. 

The HVCTS goes some way to address this unfairness, raising revenue from those with the 1% most valuable properties in England to support funding for local government services. 

Background to the measure 

The measure was announced at Budget 2025, and a consultation on the detailed design was launched on 19 May 2026. The government published its response to the consultation on 28 October 2028.

Detailed proposal 

Operative date 

The measure will come into force from 1 April 2028.

Current law

HVCTS is being legislated for in section 3 of the Finance Bill 2026-27. The government will bring forward secondary legislation in 2027. 

Proposed revisions 

There are no proposed revisions as this is a new charge.

Summary of impacts 

Exchequer impact (£ million) 

2026 to 2027	2027 to 2028	2028 to 2029	2029 to 2030	2030 to 2031	2031 to 2032
-90	-115	365	395	395	405

The figures in this table combine costings from Autumn Budget 2025 and Budget 2026.

Autumn Budget 2025 — High Value Council Tax Surcharge: Introduce a surcharge on owners of residential properties values over £2 million in England from 1 April 2028, which is set out in Table 6.3 of Budget 2026. More details can be found in the policy costings document alongside Budget 2025. 

Budget 2026 — High Value Council Tax Surcharge: Confirm eligibility for deferrals, discounts and exemptions from 1 April 2028, which is set out in Table 6.1 of Budget 2026. More details can be found in the policy costings document alongside Budget 2026. 

Other negligible impacts have been included.

Economic impact 

This measure is not expected to have any significant macroeconomic impacts. 

Impact on individuals, households and families 

This measure is expected to impact an estimated 150,000 individuals who own residential properties worth £2 million or above, by making them liable to pay the HVCTS. Local authorities will collect the charge alongside existing Council Tax. 

This measure is not expected to impact individuals’ experience of dealing with HMRC, as it does not change any processes or tax administration obligations for individuals beyond introducing liability for the HVCTS. 

Liability for HVCTS is based on the ownership of a high-value asset rather than the income of homeowners. The government recognises that a small number of homeowners may struggle to pay the HVCTS upfront. This might include individuals who bought or inherited their home, but who now have lower income, or those who experience a temporary change in circumstances such as job loss or ill health. To support those who may struggle to pay, the government will make a deferral scheme available which permits payment of HVCTS to be delayed until change of ownership, where specific eligibility criteria are met.

Deferral schemes are used in other countries in respect of similar charges, such as in Ireland and Canada. In England, Deferred Payment Agreements (DPAs) are a similar concept in respect of adult social care costs which allow individuals to delay accessing equity in their home to pay for their care. Local authorities will assess eligibility for the HVCTS deferral scheme against nationally set criteria, which will be set out in secondary legislation. 

This measure is not expected to impact on family formation, stability, or breakdown. 

Equalities impact 

The HVCTS is likely to impact individuals who own houses worth £2 million or more. An individual may be affected regardless of their protected characteristics. If a protected group is overrepresented in this population, then it will be disproportionately impacted. 

Individuals aged between 45 to 64 are estimated to be overrepresented in the impacted population (40%) compared to their prevalence in the UK Adult Population (30%). 

HMRC does not currently hold data on the other protected characteristics of individuals impacted by this measure and so cannot assess if there are any impacts on other protected groups. 

Administrative impact on business including civil society organisations 

This measure is expected to have a negligible impact on an estimated 15,000 businesses and civil society organisations who own residential properties worth £2 million or above, by making them liable to pay the HVCTS. Local authorities will collect the charge alongside existing Council Tax. 

One-off costs for businesses are expected to include familiarisation with the change. There are expected to be no ongoing costs.

This measure is not expected to impact businesses’ experience of dealing with HMRC, as it does not change any processes or tax administration obligations beyond introducing liability for the HVCTS. 

This measure is expected to impact civil society organisations in the same way as businesses. 

Operational impact (£ million) (HMRC or other) 

There will be initial one-off costs to deliver the charge, as well as ongoing operational costs. Local authorities and HMRC VO will be fully funded for the delivery, and ongoing administration, enforcement and operational activity for the charge. 

Other impacts 

Impact on local authorities

Local authorities will be responsible for administration and enforcement of the tax. We anticipate local authorities will require additional staffing and IT systems to carry out these functions. The government will continue to work with local authorities to quantify this impact, as well as undertaking a full new burdens assessment. 

Justice impact

Local authorities will be responsible for administration and enforcement of the tax, and will have enforcement mechanisms in place to pursue non-payment. Where charges remain unpaid local authorities may apply to the magistrates court for a liability order, enabling enforcement action in line with the Council Tax enforcement framework. New legislation will also create criminal offences to ensure effective administration of the surcharge. This measure is not expected to a have a significant impact on the justice system.

There may be instances where homeowners may wish to dispute a banding decision or a bill they have received with the relevant body — this is called making a challenge. If they are not happy with the outcome of their challenge, then they can appeal to the Valuation Tribunal for England. This is expected initially to increase the volume of appeals heard by the Valuation Tribunal, but is not expected to have significant long term impacts.

Monitoring and evaluation 

This measure will be monitored through receipts data, as well as through regular communication with local authorities and relevant stakeholders.

Further advice 

If you have any questions about this change, contact the property tax team by email at HVCTS.TIIN@hmtreasury.gov.uk.