Government consults on Mansion Tax with £7,500 top band

The government is consulting on a mansion tax that would add a High Value Council Tax Surcharge from April 2028 for homes worth £2m or more. The charge would sit on top of council tax and be paid by the owner, not the occupier.

Under the proposed bands, homes worth between £2m and £2.5m would pay £2,500 a year. Properties valued at £2.5m to £3.5m would pay £3,500, homes worth £3.5m to £5m would pay £5,000, and homes worth more than £5m would pay £7,500.

Sarah Coles on cost

Sarah Coles, AJ Bell head of personal finance, said the cost “won't break the bank” for those on high incom... Her comment points to a narrower set of households than the label suggests, because the surcharge is tied to property value rather than the person living there.

That ownership rule matters for leasehold homes as well. In some cases, the leaseholder would be the person liable for the charge, even if someone else lives in the property.

2025 Autumn Budget measure

The mansion tax was announced in the 2025 Autumn Budget, and the consultation now sets out how the charge would be applied if it goes ahead. The structure is simple: three lower bands start at £2,500 a year and rise to the £7,500 top rate once a home is valued above £5m.

For owners, the practical test is valuation. The surcharge begins at £2m, so the difference between a home just below that threshold and one just above it determines whether any extra annual bill is added at all.

April 2028 start

The surcharge is expected to be added to council tax from April 2028. That gives owners of higher-value homes a set date to prepare for the new annual bill, while the consultation leaves the final shape of the measure to the government process already under way.