How much is the surcharge?

It is banded from £2,500 a year for homes worth £2m to £2.5m, up to £7,500 a year for homes worth £5m or more, with amounts uprated by CPI inflation each year.

Who pays it — the owner or the tenant?

Unlike normal Council Tax, which is usually paid by occupiers, the surcharge is paid by the owner of the property. For a let property, that means the landlord.

Is the surcharge tax deductible for landlords?

Council Tax on a let property is generally an allowable expense against rental profit. Treatment of the new surcharge should be confirmed once detailed rules are published; check current HMRC guidance.

High Value Council Tax Surcharge 2028: the ‘Mansion Tax’ Explained

Q: What is the High Value Council Tax Surcharge?

It is a new annual charge — often called the mansion tax — on residential property in England worth £2 million or more, starting in April 2028. It is paid on top of normal Council Tax.

Q: When does it start and how are homes valued?

It applies from April 2028. Properties are valued at their estimated market value in 2026, with revaluations by the Valuation Office every five years (next in 2033).

Q: Does the surcharge apply outside England?

The High Value Council Tax Surcharge applies to residential property in England. Scotland and Wales set their own property taxes.

Last updated 28 June 2026 · 7 min read · By the LandlordTaxAi Editorial Team

The short answer

From April 2028, owners of residential property in England worth £2 million or more will pay a new annual High Value Council Tax Surcharge — the so-called mansion tax. It is banded from £2,500 to £7,500 a year, paid on top of normal Council Tax, and crucially is the responsibility of the owner, not the tenant.

The Autumn Budget 2025 introduced a brand-new property charge aimed at the most valuable homes. For landlords with high-value lettings, it is a cost worth understanding early — because, unlike ordinary Council Tax, it falls on the property owner even when the home is let.

This guide covers the bands, the timing, how valuations work and what it means for landlords. For the full Budget picture, see our Autumn Budget 2025 for landlords roundup.

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Quick landlord tax estimate

A general Income Tax estimate on your total taxable income. The surcharge is a separate annual property charge, not Income Tax.

Total taxable income

Result

Personal allowance: £12,570
Taxable income: £32,430
Income Tax due: £6,486
Take-home (income − tax): £38,514

Uses 2026/27 rates and the £12,570 personal allowance. Estimate only — not tax advice.

The surcharge bands

The surcharge uses four value bands. The amounts below are the announced starting figures and will be uprated by CPI inflation each year.

Property value	Annual surcharge
£2m to £2.5m	£2,500
£2.5m to £3.5m	£3,500
£3.5m to £5m	£5,000
£5m and above	£7,500

The surcharge is in addition to normal Council Tax, not instead of it. The exact band boundaries are being finalised through consultation — confirm the published detail before relying on a figure.

How homes are valued

Properties will be placed in a band based on their estimated market value in 2026, assessed by the Valuation Office. Those 2026 values form the basis for the surcharge from April 2028. Revaluations will then happen every five years, with the next due in 2033.

Because the £2m entry point is not indexed to general house-price growth between revaluations, more homes may be drawn in over time as values rise — a similar “fiscal drag” effect to frozen Income Tax thresholds.

Why it matters to landlords

For normal Council Tax, the occupier (your tenant) usually pays. The High Value Council Tax Surcharge is different: it is charged on the owner. So a landlord letting a £2m+ home in England would be liable for the surcharge even though the tenant pays the ordinary Council Tax.

It affects prime and high-value lettings in London and the South East most.
It is an annual, recurring cost, not a one-off like SDLT.
Whether it is deductible against rental profit will depend on the final rules — ordinary Council Tax on a let property generally is allowable.

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Frequently asked questions

What is the High Value Council Tax Surcharge?

A new annual charge — the mansion tax — on English homes worth £2 million or more, starting April 2028, paid on top of normal Council Tax.

How much is it?

Banded from £2,500 a year for £2m–£2.5m homes up to £7,500 a year for homes worth £5m or more, uprated by CPI each year.

Who pays — owner or tenant?

The owner. Unlike normal Council Tax, the surcharge falls on the property owner — so the landlord pays it on a let property.

When does it start and how are homes valued?

From April 2028, based on estimated 2026 market values, with revaluations every five years (next in 2033).

Does it apply outside England?

It applies to residential property in England. Scotland and Wales set their own property taxes.

Is it tax deductible for landlords?

Council Tax on a let property is generally allowable against rental profit. The exact treatment of the new surcharge should be confirmed once detailed rules are published.

Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC and government guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.

Last reviewed: 28 June 2026 · Researched against primary UK sources: https://www.gov.uk/government/consultations/high-value-council-tax-surcharge/high-value-council-tax-surcharge ; https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html . This article is informational only and does not constitute tax advice. Check the latest details on GOV.UK or with a qualified accountant.