The government has opened a consultation on the proposed High Value Council Tax Surcharge (HVCTS), which is expected to come into effect in England from 1 April 2028.
The surcharge would apply to residential properties valued at £2 million or more and would be charged in addition to existing Council Tax.
Although it is estimated that fewer than 1% of properties will be affected, the consultation provides important insight into how the new system could work in practice.
What Is the High Value Council Tax Surcharge?
The proposed HVCTS is an additional property tax aimed at higher-value residential homes in England.
The surcharge would sit alongside standard Council Tax and would apply based on the property’s value.
The consultation outlines how properties will be:
- Identified
- Valued
- Placed into surcharge bands
- Billed and collected
How Will Properties Be Valued?
The Valuation Office will carry out a targeted valuation exercise to identify properties within scope.
Properties will be grouped into one of four value bands based on their market value.
To assess value, the Valuation Office will consider:
- Comparable property sales
- Property characteristics and attributes
- Improvements or changes to the property
Revaluations are proposed every five years, with the next planned revaluation taking place in 2033.
Newly built properties after April 2028 would be valued when completed or occupied.
Which Properties Will Be Included?
HVCTS would apply to residential dwellings defined as:
- Self-contained living accommodation
Mixed-use properties may also be included where there is a distinct residential element.
The valuation would also include:
- Gardens
- Garages
- Private storage buildings linked to the property
Who Would Be Responsible for Paying?
Under the proposals, the legal owner of the property — rather than the occupier — would normally be responsible for paying the surcharge.
Where properties are jointly owned:
- Owners would be jointly and severally liable
The consultation also confirms:
- Trustees would remain liable in many trust arrangements
- Long leaseholders may be responsible instead of freeholders where leases exceed 21 years
Are There Any Exemptions or Deferrals?
The proposals include a deferral scheme for certain eligible individuals.
This may allow payment to be delayed until the property is sold in cases involving:
- Low income or savings
- Disability
- Severe mental impairment
Some property types may also qualify for exemptions or discounts.
How Will the Charge Be Paid?
The first HVCTS bills are expected to be issued in March 2028.
Payments would be collected by local authorities in a similar way to standard Council Tax.
The default proposal is:
- 12 monthly payments
- With an option to request 10 instalments instead
Possible Premium for Non-UK Residents
The consultation is also exploring whether an additional premium should apply to non-UK resident owners of affected properties.
No final decisions have been made, but the government is seeking feedback on this aspect as part of the consultation process.
Appeals and Challenges
Property owners would be able to challenge:
- Property valuations
- Banding decisions
- Liability decisions
- Billing errors
If disputes are not resolved, appeals could be made to the Valuation Tribunal for England.
Consultation Deadline
The consultation remains open until 14 July 2026.
Property owners, landlords, trustees and advisers may wish to review the proposals carefully and consider how the rules could affect them if introduced.
Final Thoughts
While the High Value Council Tax Surcharge is still under consultation, the proposals provide a clearer picture of how the system may operate from 2028 onwards.
For those potentially affected, early awareness and planning may help avoid surprises and allow time to review property ownership and tax arrangements if needed.
If you would like advice on property tax planning or how future tax changes may affect your situation, we would be happy to help.
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📧 info@ojwassociates.co.uk
