The government has launched a consultation on how High Value Council Tax Surcharge will be delivered, which was announced in the 2025 budget by Chancellor Rachel Reeves. This will be a levy of a higher rate of tax on properties worth £2 million or more and will be payable by the owners. The consultation confirms whereas council tax is payable by the occupiers, the levy would be payable by the owners.
How Long Is the Consultation and What Does It Cover?
The consultation will be eight weeks long and will run to 14th July to review how the High Value Council Tax Surcharge could work. The first stage of the consultation is to identify the charging brackets which will increase in line with the value of the property. Charges will then be updated annually in line with consumer price inflation.
The Valuation Office (VO), part of HMRC, will be responsible for valuing properties using combining automated valuation models with “professional valuer judgement”, the criteria for which includes the sales prices of similar properties, adjusting for differences (property type, size, age, number of rooms and parking); the same used as is used for council tax. Revaluations will be conducted by the VO every five years, with the following revaluation taking place in 2033.
Who Is Liable to Pay the High Value Council Tax Surcharge?
In respect of leasehold properties, the levy will be levied on the leaseholder on long leases granted for more than 21 years. In respect of properties held in trust, the proposal at this stage suggests the trustees will be liable. The consultations at this stage also suggest there will be exceptions to student halls, property owned by the Ministry Defence, embassies, and property for social housing including care homes. Newly built properties charges will only come into force 12 months following completion.
When Will the High Value Council Tax Surcharge Come Into Force?
The levy is due to come into place in March 2028 and payable over 10 or 12 months in the tax year 2028-29 similar to council tax. We will look to provide further updates in due course.
Speak to Our Property Solicitors
If you have any questions or require any assistance from our experienced Solicitors with your property matters, please do not hesitate to contact us by phone 01925 263 273 or email enquiries@fionabruce.co.uk.
The contents of this post do not constitute legal advice and are provided for general information purposes only ■
