The Government's High Value Council Tax Surcharge, referred to as the 'Mansion Tax', is scheduled to take effect in April 2028. This surcharge will be levied on properties in England with a valuation of £2 million or more.
The annual charges are set at £2,500 for properties valued between £2 million and £2.5 million, £3,500 for those between £2.5 million and £3.5 million, £5,000 for properties from £3.5 million to £5 million, and £7,500 for properties exceeding £5 million.
The Government intends to determine property values using comparable sales and other relevant information. However, concerns have been raised regarding the difficulty of valuing higher-end properties due to fewer comparable sales and instances where sales of underlying company shares are not recorded on the Land Registry.
The Office for Budget Responsibility (OBR) anticipates that approximately one in five affected homeowners, out of an estimated 165,000 properties initially caught by the tax, may appeal their valuations. If 40% of these appeals are successful, over 13,000 valuations could be altered or overturned.
Valuation authorities reportedly have powers, subject to safeguards, to seek access to properties for internal inspections when deemed necessary. While owners can initially refuse, obstruction could lead to penalties of up to £500 in certain circumstances, with a tribunal safeguard involved before compulsory entry.
The Treasury projects the surcharge will generate around £430 million annually, with the OBR's costing placing the figure at approximately £400 million in 2029–30.