High-Value Council Tax Surcharge

The government has announced plans to introduce a new levy, the High-Value Council Tax Surcharge (HVCTS), which will apply to owners of residential properties in England valued at £2 million or more.

The surcharge is expected to take effect from April 2028, with a public consultation on the detailed design scheduled for early 2026. At present, HVCTS will apply only to residential properties in England. It is not yet clear whether the devolved administrations in Scotland, Wales, or Northern Ireland will introduce similar measures.

Not based on existing Council Tax bands

In information released following the November 2025 Budget, the government confirmed that the surcharge will not be calculated by reference to existing council tax bands. As a result, properties currently in bands F, G, or H (which are based on 1991 property values) will not automatically fall within the scope of the surcharge.  Instead, a new valuation process will be introduced. The Valuation Office Agency (VOA) will carry out a targeted valuation exercise in 2026, assessing current market values. Properties that are assessed to be valued at £2 million or more will then be allocated to one of four new HVCTS bands.

Importantly, existing council tax bands will remain unchanged, and any reassessment for HVCTS purposes will not affect a property’s council tax banding. For owners of property in London and other high-value areas, the new surcharge could represent a significant additional annual cost from 2028 onwards. Because the surcharge is based on current market values rather than historic 1991 valuations, properties that previously avoided the highest council tax bands may now be brought within scope if their present-day value exceeds the £2 million threshold.

If you are concerned about how the proposed surcharge may affect you, or if you are considering selling property and would like to understand the potential tax implications, please do get in touch. We would be happy to provide tailored advice based on your individual circumstances. Please contact Steven Martin on 023 8046 1225 or email Steven Martin.