Properties value greater than £2m in England will face a brand new annual ‘mansion’ levy from 2028, chancellor Rachel Reeves introduced in yesterday’s Finances. The tax, added on high of current council tax, will rise via 4 separate bands relying on property worth.
The transfer, which Reeves described as a step to sort out long-standing wealth inequality within the nation, would require the valuation of houses within the high council tax bands – F, G and H – for the primary time since 1991.
Properties might be assessed based mostly on 2026 valuations supplied by the federal government’s Valuations Workplace Company.
The council tax surcharge bands:
Properties valued from £2m to £2.5m can pay £2,500
Properties valued from £2.5m to £3.5m can pay £3,500
Properties valued from £3.5m to £5m can pay £5,000
Properties valued at greater than £5m can pay £7,500
However the coverage has drawn criticism from the Institute for Fiscal Research (IFS), which argues the measure doesn’t go far sufficient and {that a} revaluation of council tax bands is lengthy overdue.
There have been requires a full reform of the council tax system as it’s presently based mostly on the values of properties in 1991.
Ryan Mathews, managing director, Stirling Ackroyd Surveyors, a part of LRG, commented: “After weeks of hypothesis and a unprecedented begin to Finances day, we lastly have readability on property taxation. The headline measure for our sector is the brand new Excessive Worth Council Tax Surcharge on properties value £2m or extra.
“From a surveying perspective, this raises fast sensible questions. The federal government has confirmed this cost might be based mostly on up to date valuations, however with council tax bands frozen since 1991, there is no such thing as a present register of property values for houses on this bracket. Somebody might want to assess these properties, and the methodology issues.
“A distinction of £100,000 both facet of the edge may imply paying £2,500 yearly or nothing in any respect. Owners near £2m will inevitably search skilled valuations to verify their place, and we anticipate to see elevated demand for RICS valuations as 2028 approaches.
“The broader council tax revaluation for bands F, G and H that some had predicted didn’t materialise. However for the highest finish of the market, the valuation questions are simply starting.”
