Consultation on High Value Council Tax Surcharge

The High Value Council Tax Surcharge (HVCTS) will apply to owners of residential properties in England worth £2 million or more and is payable in addition to the existing Council Tax.

• It is estimated that the charge will affect less than 1% of properties.

The consultation provides an overview of the design of the HVCTS and seeks views on proposals.

• Overview of the design of the HVCTS.
  • The Valuation Office will carry out a targeted valuation exercise to identify which properties fall into the scope of HVCTS.
    • Properties will be placed in one of four bands based on the value of the property.
    • To determine a property's valuation, the Valuation Office will look at the sales prices of similar properties as well as other attributes of the property.
    • Charges will be uprated in line with the Consumer Price Inflation (CPI) each year. 
  • General revaluations will be carried out every five years.
    • Properties built after April 2028 will be valued either on completion or from the day the property is occupied.
    • In most cases, where a property has been significantly improved or changed, it will not be revalued until it is disposed of or the next general revaluation takes place, whichever is sooner.
  • The charging structure will be: 
    • For properties valued between £2m and £2.5m, the charge will be £2,500.
    • For properties valued between £2.5m and £3.5m, the charge will be £3,500. 
    • For properties valued between £3.5m and £5m, the charge will be £5,000.
    • For properties valued above £5m, the charge will be £7,500.
• The proposed scope of the HVCTS.
  • HVCTS will apply to 'dwellings', which are defined as a self-contained unit of residential property used as living accommodation.
    • Gardens, garages and private storage buildings that form part of the dwelling will be included.
    • Properties with a mixed use where the residential element is distinct and self-contained will be included.
  • The legal owner of the property, rather than the occupier, will be liable for the surcharge.
    • Joint owners will be jointly and severally liable.
    • Where the Beneficial owner of a property is different to the legal owner, it is the legal owner who will be liable to the surcharge.
    • Trustees will be liable to pay the tax, even in bare trust arrangements.
  • For properties held by a leaseholder, the government is proposing that the leaseholder will be liable to HVCTS if the lease is defined as a long lease.
    • A long lease is defined as a lease that was initially granted for more than 21 years, or the law treats it as such.
    • For other leases, the surcharge would be assessed on the freeholder.
• A deferral mechanism to support those who cannot pay.
  • A deferral scheme will be made available, which allows HVCTS payments to be delayed until the property is disposed of.
    • It is proposed that income and capital savings thresholds used in the welfare system will apply. 
    • Deferrals will also be available where the property is the main home of someone who is disabled or severely mentally impaired.
  • Some property types will be exempted or receive a discount, such as those used in employment or for charitable purposes. 
• The billing process.
  • The first HVCTS bills will be sent out in March 2028.
    • Local authorities will collect payment, similarly to Council Tax.
    • 12-monthly payments will be the default, but it will be possible to request 10 payments.
  • The consultation collects information that the government will use to explore whether to charge an additional HVCTS premium to non-UK resident owners of homes that are liable for the tax.
• The proposed appeals process.
  • Owners will be able to challenge or appeal their bill if:
    • They believe their property band is incorrect or that their property is not within the scope of HVCTS.
    • They do not believe they are the liable person or that the bill is correct.
  • If unhappy with the outcome of the challenge, it will be possible to appeal to the Valuation Tribunal for England.
  • Because HVCTS is a new charge, homeowners will be given an initial 8-month period to challenge banding. After this, a standard 6-month challenge period will apply.
• Administration and enforcement mechanisms.
  • It is intended that the existing Council Tax enforcement framework will be replicated for HVCTS. This would include changes the government intends to make as set out in the response to the consultation on modernisation of Council Tax. 
• Corrections to property details ahead of implementation
  • A draft list of properties expected to be within the scope of the charge will be published in late 2027. Homeowners will then be able to contact the Valuation Office to report any inaccuracies.
• The equalities impact of the proposed approach.
  • The government is seeking views on whether there may be any disproportionate impacts on people sharing protected characteristics.

The consultation closes on 14 July 2026. Responses can be made by following the link on the consultation webpage.

Useful guides on this topic

Joint property: Legal v beneficial ownership
What is the difference between legal and beneficial ownership? What are the tax consequences? Are the rules different for married couples and civil partners?

Adviser's Guide: Property Business, profits and losses
What is property income? How is it taxed? How are profits calculated? How are losses relieved? Is National Insurance paid on property income? Is property income classed as a business activity?

External links

Consultation: High Value Council Tax Surcharge

Question 1: Do you agree the legal owner should generally be liable for HVCTS?

Question 2: Do you agree that liability should sit with the leaseholder where the lease has been granted for more than 21 years, or where the law treats a lease as having been granted as such?

Question 3: Are there forms of leases, within or outside of the categories mentioned above, where different treatment should be considered?

Question 4: Do you agree that in trust arrangements trustees should be liable for HVCTS?

Question 5: Do you agree with the proposed income (£35,000) and capital (£16,000) thresholds for deferral?

Question 6: Do you agree that deferral should be available to homeowners who meet the income or savings thresholds?

Question 7: Do you agree with the proposed disability-based criteria, aligned with existing Council Tax criteria?

Question 8: Can you foresee any circumstances where the proposed deferral scheme is not sufficient? Please provide evidence to support your views.

Question 9: Do you agree that change of ownership should be the default end point for deferral?

Question 10: For deferred payments, what level should the interest rate be set at?

Question 11: What additional resources do you anticipate local authorities may need access to in order to deliver the proposed scheme?

Question 12: Do you agree with the proposed property types to be exempted from or discounted under HVCTS?

Question 13: Noting exemptions will only apply to property types with specific characteristics that are unlikely to change, do you have views on which properties in the proposed list should be exempt and which should be discounted?

Question 14: Is there a case for providing a discount to tied properties?

Question 15: Is there a case for providing a discount to charities where they meet a charitable purpose test?

Question 16: What types of evidence would it be possible for taxpayers to provide to demonstrate eligibility for relevant discounts?

Question 17: What additional resources (for example, extra information) do you anticipate local authorities may need in order to assess eligibility for a discount?

Question 18: Do you have views on the proposed system of penalties set out above? What else would most help local authorities administer HVCTS efficiently?

Question 19: Noting the need to balance fairness with incentivising the provision of accurate information, do you have views on whether the penalty outlined in this section is sufficient?

Question 20: Would allowing LAs to apply a penalty to other individuals (such as managing agents) to support compliance with information requests help identify hard-to-find owners? If so, what would an appropriate penalty level be?

Question 21: Do you have any evidence on the housing market impacts of non-UK resident owners in high pressure housing markets?

Question 22: Do you think the government should explore charging additional High Value Council Tax Surcharge premium on non‑UK resident owners of homes liable for the tax? Please explain your answer.

Question 23: What do you think the potential impacts of such a premium could be?

Question 24: How easy or difficult do you think it would be for owners to obtain and provide the evidence needed to support a band challenge (for example, similar properties with different bands, or sales information for similar properties from 2026)?

Question 25: Do you agree sharing information earlier in the dispute process about property banding would help to resolve disputes?

Question 26: What would help homeowners feel confident that a challenge or appeal has been handled fairly and independently, even where the decision is not changed?

Question 27: Do you agree with the approach that homeowners should be able to appeal the VO banding and alterations decision and local authority’s decision on liability to the Valuation Tribunal?

Question 28: Councils will require powers to enforce payment of the tax. Do you agree powers should align to those currently available in Council Tax?

Question 29: Do you have views on whether any of the proposals in this consultation will have any disproportionate impacts on persons who share a protected characteristic?