The government’s consultation on HVCTS, dubbed the ‘mansion tax’, has closed with confirmation that it will apply to homeowners of residential property worth £2m or more in England.
The surcharge will be imposed on owners, not occupiers, and will be in addition to their existing council tax from April 2028.
The first HVCTS bills will be issued in March 2028.
The surcharge will start from £2,500 on homes worth between £2-2.5m, rising to £7,500 on homes worth £5m and more, and properties will be placed into bands depending on their value. Charges will increase in line with CPI inflation each year from 2029-30 onwards.
It is estimated to raise around £400m of revenue per year from 2028/29.
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For those with limited ability to pay, the government will introduce a deferral scheme for households with an annual income of £35,000 or less, capital savings of £16,000 or less or where a member of the household meets disability criteria.
Payment will be delayed until the ownership changes, and taxpayers can end the deferral at any point and settle their payments. A “fair rate” of interest will be applied.
Other exemptions and discounts will also apply to certain properties depending on their characteristics and use, such as care homes, registered social housing and working farmhouses.
A premium of 100% will be charged on properties left “substantially unfurnished” or unoccupied for at least 12 months.
Valuations will be based on data available during April 2026.
The government said most properties will be in the correct band, but in limited circumstances, the Valuation Office will visit properties to ensure accuracy and could use the ‘powers of entry’ code of practice.
Revaluations will be carried out every five years, starting in 2033, and homeowners can dispute the banding decision.
