Families across England might soon feel the pinch from what some are calling a new “mansion tax,” even if their homes are worth less than the initially targeted £2million.
The warning comes as Chancellor Rachel Reeves confirmed plans to introduce a high-value council tax surcharge starting April 2028.
The levy is designed to affect the priciest properties, but experts caution that homes with lower valuations could also be caught in the net.
This has sparked concern among homeowners, especially in regions where property prices are already high.
How the Surcharge Will Work
Under the new system, homes worth over £2million will face an annual charge on top of regular council tax.
The surcharge will be structured into four bands:
- Properties above £2million: £2,500 per year
- Properties above £3million: £4,000 per year
- Properties above £4million: £5,500 per year
- Properties above £5million: £7,500 per year
London and the South East are expected to bear the brunt, as these areas host the country’s most expensive homes.
Could Cheaper Homes Be Affected?
While the surcharge officially targets properties worth £2million and up, the Valuation Office has indicated that homes valued as low as £1.5million could be reviewed.
Jonathan Russell, chief executive of the Valuation Office, told MPs that the agency will ensure no eligible properties are missed.
He explained that this will involve checking homes with “indicative values” of £1.5million and upwards to verify they fall within the correct band.
At the same time, properties clearly above £5million won’t require as much scrutiny.
How Homes Will Be Valued
The Valuation Office will use its standard approach to determine property values.
Mr. Russell emphasized that factors like location, number of bedrooms, house type (detached or semi-detached), and overall size will all play a role.
However, he admitted some categories of property, such as convents or retirement homes, have not yet been clarified.
The office is still working out whether these types of properties will be exempt from the surcharge.
Political Reactions and Criticism
Senior Tory MP Sir James Cleverly criticized the move, arguing that Labour’s plan could unfairly target ordinary families.
He warned that homes could quickly be reclassified as “mansions,” leading to unexpectedly high bills.
“Council tax is already rising, and under Labour, average families in B and D band homes could face an additional £1,143 across this parliament,” Sir James said.
Government Clarifications
A Treasury spokesperson reassured homeowners that the £2million threshold will not change.
They confirmed that the Valuation Office will carry out assessments to ensure only homes that genuinely meet the threshold will be included.
This leaves homeowners waiting to see how many properties ultimately fall under the new levy—and whether their own homes might be affected sooner than expected.
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