Properties worth more than £2m in England will face a new annual ‘mansion’ levy from 2028, chancellor Rachel Reeves announced in yesterday’s Budget. The tax, added on top of existing council tax, will rise through four separate bands depending on property value.

The move, which Reeves described as a step to tackle long-standing wealth inequality in the country, will require the valuation of homes in the top council tax bands – F, G and H – for the first time since 1991.

Properties will be assessed based on 2026 valuations provided by the government’s Valuations Office Agency.

The council tax surcharge bands: 

Properties valued from £2m to £2.5m will pay £2,500

Properties valued from £2.5m to £3.5m will pay £3,500

Properties valued from £3.5m to £5m will pay £5,000

Properties valued at more than £5m will pay £7,500

But the policy has drawn criticism from the Institute for Fiscal Studies (IFS), which argues the measure does not go far enough and that a revaluation of council tax bands is long overdue.

There have been calls for a full reform of the council tax system as it is currently based on the values of properties in 1991.

Ryan Mathews, managing director, Stirling Ackroyd Surveyors, part of LRG, commented: “After weeks of speculation and an extraordinary start to Budget day, we finally have clarity on property taxation. The headline measure for our sector is the new High Value Council Tax Surcharge on properties worth £2m or more.

“From a surveying perspective, this raises immediate practical questions. The government has confirmed this charge will be based on updated valuations, but with council tax bands frozen since 1991, there is no current register of property values for homes in this bracket. Someone will need to assess these properties, and the methodology matters.

“A difference of £100,000 either side of the threshold could mean paying £2,500 annually or nothing at all. Homeowners close to £2m will inevitably seek professional valuations to confirm their position, and we expect to see increased demand for RICS valuations as 2028 approaches.

“The wider council tax revaluation for bands F, G and H that some had predicted did not materialise. But for the top end of the market, the valuation questions are just beginning.”