High Value Council Tax Surcharge
Published 26 November 2025
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The current Council Tax system was introduced in 1993. It taxes domestic property through eight valuation bands, based on property values in 1991. Local authorities set annual Council Tax levels and administer the tax, with support and exemptions available. In 2024-25, Council Tax raised £40.3 billion across England.
The High Value Council Tax Surcharge (HVCTS) is a new charge on owners of residential property in England worth £2 million or more in 2026, taking effect in April 2028. A public consultation on details relating to the surcharge will be held in early 2026.
Homeowners, rather than occupiers, will be liable to the surcharge and will continue to pay their existing Council Tax alongside the surcharge. Social housing will not be in scope.
The Valuation Office will conduct a targeted valuation exercise to identify properties above £2 million and therefore in scope. Fewer than 1% of properties in England are expected to be above the £2 million threshold. Revaluations will be conducted every five years.
Under the current system, the average band D charge for a typical family home across England is £2,280. That is £250 more per year than a £10 million property in Mayfair, based on the band H charge in the City of Westminster, currently pays. This surcharge will change that, implementing a significant reform to improve fairness within England’s property tax system.
Properties above the £2 million threshold will be placed into bands based on their property value. Charges will increase in line with CPI inflation each year from 2029-30 onwards.
High Value Council Tax Surcharge charging structure.
| Threshold (£m) | Rate (£) |
|---|---|
| £2.0-2.5 | £2,500 |
| £2.5-3.5 | £3,500 |
| £3.5-5.0 | £5,000 |
| £5+ | £7,500 |
The HVCTS will be administered alongside existing Council Tax by Local authorities, who will collect this revenue on behalf of central government. The HVCTS is estimated to raise around £430 million of revenue per year from 2028/29 to support funding for local government services. Local authorities will be fully compensated for the additional costs of administering this new tax. The government will undertake a new burdens assessment to ensure costs to local authorities are fully funded.
The government will ensure a support scheme is in place for those who may struggle to pay the charge. It is important this scheme is targeted at those who need it most. This will be a key area of consultation in the New Year.
The government will also consult on a full set of reliefs and exemptions, as well as proposed rules for more complex ownership structures including companies, funds, trusts and partnerships. The consultation will also cover treatment of those who are required to live in a property as a condition of their job (tied property).