Government launches consultation on ‘Mansion Tax’ design and delivery

The government has published a consultation seeking views on the design and delivery of the High Value Council Tax Surcharge (HVCTS), which will apply to residential properties worth £2m and above in England.

The consultation on the so-called ‘Mansion Tax’ proposed homes valued between £2m and £2.5m would pay £2,500 a year on top of their council tax bill, with the amount payable rising with home valuation thresholds.

Homes in England worth between £2.5m and £3.5m would be subject to an additional charge of £3,500 a year, increasing to £5,000 for houses worth between £3.5m and £5m, and to £7,500 for those worth over £5m.

Owners of residential property in England worth £2m or above will be liable to paying the HVCTS from April 2028, and the annual charges will be uprated in line with CPI inflation.

The owners of properties, rather than the people living in them, will be subject to the charge, and the consultation sought views on how ‘owner’ should be defined.

It also outlined proposals for how the HVCTS will be designed, the approach to valuations, the enforcement mechanics for the tax, and the proposed support mechanism for those who cannot pay.

Furthermore, the government set out a proposed list of property level discounts and exemptions, the billing and administration process, how a homeowner can challenge their banding or liability, and an assessment of the impact on those with protected characteristics.

Plans to introduce the ‘Mansion Tax’ were announced in November 2025 as part of the government’s Autumn Budget, which estimated the tax would raise £400m a year by the 2029/30 financial year.

“Posh properties are set to become piggy banks when the ‘Mansion Tax’ kicks in from 2028,” commented AJ Bell head of personal finance, Sarah Coles.

“The government has started consulting on the details of the so-called HVCTS, which could bring some nasty surprises for those in the frame for these new annual charges.

“The cost won’t break the bank for those on high incomes living in expensive properties and sitting on significant liquid assets. It’s why it appeals to politicians arguing that those with the broadest shoulders should carry a heavier burden.

“However, not everyone who owns a £2m property is in this position. For those in expensive homes but on lower incomes and holding fewer assets, the charge is going to be more painful.

“The government is proposing a deferral scheme for these people, so they could let the charges roll up until the home is sold. However, the criteria it’s suggesting is remarkably tight, because household income might have to be no more than £35,000 or total household savings up to a limit of £16,000 in order to qualify.”

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