Key takeaways
- The High Value Council Tax Surcharge applies to owners of homes in England worth £2 million or more at the April 2026 valuation date.
- It takes effect in April 2028, with the first bills issued in March 2028, and adds £2,500 to £7,500 a year on top of ordinary Council Tax.
- Owners, not occupiers, are liable. Care homes, registered social housing and working farmhouses are among the exemptions.
- A deferral scheme is open to owners with household income of £35,000 or less, savings of £16,000 or less, or a disability.
- Draft bands will be visible in autumn 2027. Disputes go to the Valuation Office first, then the Valuation Tribunal for England.
The High Value Council Tax Surcharge is a new annual charge on owners of residential property in England worth £2 million or more. Budget 2026 confirmed it will take effect in April 2028 and be added to existing Council Tax. The Treasury expects it to raise about £400 million a year from 2028/29. Fewer than 1% of properties in England are expected to fall in scope.
How much the surcharge costs
The charge depends on the property’s value band, not its current Council Tax band. It is a flat amount per band.
| Property value | Annual surcharge |
|---|---|
| £2.0m to £2.5m | £2,500 |
| £2.5m to £3.5m | £3,500 |
| £3.5m to £5.0m | £5,000 |
| £5.0m and above | £7,500 |
The charges rise with CPI inflation each year from 2029/30. Decisions on whether to uprate the bands will be taken alongside revaluations, which will happen every five years. The next revaluation is in 2033.
The Treasury compares the charge with today’s Council Tax. A Band D property in Darlington or Blackpool, worth around £400,000, pays £2,400 to £2,600 a year. A Band H property in Mayfair valued at £10 million pays around £2,100.
Who pays: owners, not occupiers
Homeowners are liable, rather than the people living there. The surcharge applies in addition to the Council Tax that the occupier or owner already pays. The consultation covered how “owner” should be defined, so read the government’s response before advising clients with jointly owned, trust-held or let properties.
Local authorities will bill and collect the surcharge on behalf of central government. They will be fully compensated for the extra administration costs. The Treasury will carry out a new burdens assessment.
Exemptions, discounts and deferral
Some property types will be exempt or discounted. The factsheet names care homes, registered social housing and working farmhouses. The full list is in the government’s response to the consultation.
- Unoccupied homes. A 100% premium will apply to properties left substantially unfurnished and unoccupied for 12 months or more.
- Deferral. Owners can defer payment until the property changes hands if the household meets any one of three tests: annual household income of £35,000 or less, capital savings of £16,000 or less, or a household member who meets the disability criteria.
- Interest. A fair rate of interest will be applied to deferred amounts. Owners can settle earlier whenever they choose.
How properties will be valued
The Valuation Office, now part of HMRC, will run a targeted valuation exercise to find properties above £2 million. Valuations use evidence from comparable sales around the April 2026 valuation date, plus property type, age, number of rooms and area. A model produces an initial value, then professional valuers place the property in a band.
In some cases the Valuation Office may need to visit a property. This will be by prior agreement and in line with the government’s powers of entry code of practice. Owners will see their draft band in autumn 2027, and further guidance on evidence and valuations will follow.
Timeline
| Date | What happens |
|---|---|
| April 2026 | Valuation date used to judge whether a home is worth £2 million or more |
| Autumn 2027 | Owners can see draft bands |
| March 2028 | Local authorities issue the first bills |
| April 2028 | The surcharge takes effect |
| 2029/30 | Charges start to rise with CPI |
| 2033 | Next revaluation |
What advisers should do now
- List clients with homes that may be worth £2 million or more. The valuation date is April 2026, not the date of the bill.
- Check how the property is owned. Read the government’s response on who counts as the owner, and its list of discounts and exemptions.
- Budget for the cash cost. The charge is £2,500 to £7,500 a year, payable alongside Council Tax.
- Test eligibility for deferral. Clients who meet an income, savings or disability test can delay payment until the property is sold or ownership changes.
- Diarise autumn 2027. That is when draft bands appear and the challenge route opens.
The surcharge sits alongside the Budget’s wider property measures. For landlords, see Budget 2026 for landlords, which covers the new property income tax rates.
Frequently asked questions
When does the High Value Council Tax Surcharge start?
It takes effect in April 2028. Local authorities will issue the first bills in March 2028.
How much is the High Value Council Tax Surcharge?
It is £2,500 for homes worth £2.0m to £2.5m, £3,500 for £2.5m to £3.5m, £5,000 for £3.5m to £5.0m and £7,500 for £5.0m or more. The bands rise with CPI from 2029/30.
Does the surcharge apply in Scotland, Wales or Northern Ireland?
No. The Treasury describes it as a charge on residential property in England.
Can I challenge my band?
Yes. You can dispute a banding decision, including whether a property is in scope, and then appeal to the Valuation Tribunal for England if you disagree with the outcome. More guidance on evidence will be published.
Sources
Rates, thresholds and rules in this guide were checked against HMRC and GOV.UK guidance on 1 November 2026. Tax rules change, so check the current position on GOV.UK or with a qualified adviser before acting. This guide is general information, not personal advice.