One of the headline measures from last year's Autumn Budget was a push to rebalance council tax so that owners of lower-priced homes are no longer paying proportionally more than those at the top of the market. The government's solution is a new levy aimed squarely at properties valued at £2 million or more, due to come into force in 2028.
The professional body for property agents, Propertymark, has been examining the proposals and has raised some important points and recommendations.
Why the surcharge is being introduced
The existing council tax system has a well-known imbalance. Propertymark highlights the example where a Band D property in Darlington worth £400,000 pays around £2,500 a year, while a Band H property in Mayfair worth £10 million pays just £2,100. The disparity is stark, and it is one the government is now acting on.
The new charge — called the High Value Council Tax Surcharge (HVCTS) — is expected to affect fewer than 1% of properties in England. The government estimates it will raise £430 million a year to fund local services.
Who will pay it
The surcharge will apply to owners of domestic dwellings (houses and flats) valued at £2 million or more in 2026. Mixed-use properties may also be included where the residential element is distinct and self-contained. Ownership is the deciding factor: even if someone else lives at the property and pays the existing council tax bill, the legal owner will be responsible for the HVCTS.
How much will it cost
The proposed annual charges are tiered by property value:
Property value | Annual surcharge |
£2m to £2.5m | £2,500 |
£2.5m to £3.5m | £3,500 |
£3.5m to £5m | £5,000 |
Above £5m | £7,500 |
Source: HM Treasury
Charges will be uprated each year in line with Consumer Price Inflation.
How properties will be valued
Valuations will follow the same method used for standard council tax: the Valuation Office will look at sales of comparable properties and adjust for differences between them. Factors taken into account will include property type, age, number of rooms and access to parking, alongside wider sales evidence.
Properties will be revalued every five years. With the surcharge starting in 2028, the next revaluation after that is planned for 2033. Any changes to a property in the meantime — extensions, major renovations or demolitions — will be noted and factored in at the next revaluation.
The Valuation Office is expected to publish a draft list of in-scope properties in late 2027, giving owners an opportunity to check whether their home has been included before the first bills go out in March 2028.
Provisions for discounts and exemptions will be built into the system. Student halls, registered social housing and care accommodation are among those likely to be excluded.
Propertymark's concerns
Propertymark's central concern is that property agents are being left out of the valuation process. Nathan Emerson, CEO of Propertymark, commented:
"Property agents have expertise in local areas, about comparable properties, assessing home renovations and improvements, and unique characteristics of properties which are likely to feature in areas where property is valued above £2million.
"The UK Government cannot work to an inconsistent process and then not allow professionals working in the sector to support consumers and ensure it is accurate; a much more joined-up approach is needed alongside annual assessments.
"Propertymark will be engaging in the consultation process, and what the UK Government decide is classed as evidence sharing must be clear and consistent."
The consultation closes on 14 July 2026. Agents with views on the proposals can submit responses through the government's online survey.
A step in the right direction, but questions remain
The HVCTS is a meaningful attempt to address an imbalance that has existed since council tax bands were introduced in the early 1990s — and those thresholds have not been updated since. Whether the implementation lives up to the principle will depend on how accurately properties are valued and how fairly challenges are handled.
Homeward Legal will be keeping a close eye on developments as the 2028 implementation date approaches.
How Homeward Legal can help
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