The UK government first announced plans for a ‘mansion tax’ in the November 2025 Budget and the October 2026 Autumn Budget confirmed further details of how the tax will work.
Despite speculation that the threshold for mansion tax (High Value Council Tax) could drop from £2 million to £1.5 million, the threshold remained at £2 million. This means that any residential property in England worth over £2 million will be subject to an additional council tax surcharge from April 2028.
Last year, around two thirds of property transactions above the threshold were accounted for in London, with an estimated 84,000 homes in Greater London being valued at £2 million or higher. The most heavily impacted boroughs of London are expected to be Westminster, Kensington and Chelsea, Wandsworth, Richmond upon Thames and Camden.
The council tax surcharge will work on a sliding scale depending on the value bracket that the property falls into:
From 2029, the rates will increase in line with CPI inflation. While standard council tax is paid to local authorities, the surcharge will go to the Treasury.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
Buying and selling at the same time?
Here are 10 things that could go wrong, and often do go wrong, and what, if anything, you can do to avoid them.
When the mansion tax was first announced, Exchequer Secretary to the Treasury, Dan Tomlinson explained the rationale:
“A £10 million mansion in Mayfair should not be paying less council tax than an ordinary family home in Darlington or Blackpool.
“This change tackles historic unfairness, so that those with the most valuable properties pay their fair share, helping to rebalance the system and putting money back into communities up and down the country.”
There are some homeowners with properties valued at over £2m that will be able to defer the payments. These include:
The Valuation Office Agency (VOA) is currently assessing property values to establish market values in 2026. They will identify the properties that are valued above the surcharge threshold and determine which band they will fall into.
The Bank of England has reported that in August 2026, first-time buyer mortgage demand dropped to its lowest level since December 2023.
Newly appointed Prime Minister Andy Burnham delivered his first speech in the House of Commons since taking up the position, and he
The Bank of England’s latest Money and Credit report has revealed that net borrowing of mortgage debt by individuals increased to £7.7
