Global Daily Tax News, UK Sets Out Plans For New High-Value Property Tax, (Dec 2, 2025)

The UK Government has released guidance on the High Value Council Tax Surcharge (HVCTS), announced in the newly released 2025 Budget.

The levy will apply from April 2028 on owners of residential property in England worth GBP2m or more. A public consultation on details relating to the surcharge will be held in early 2026.

The Government has clarified that the surcharge will not be determined by current Council Tax bands, which are based on property values from 1991 – that is, bands F, G, and H will not be used to determine eligibility for the surcharge.

The Valuation Office Agency will carry out a separate, targeted valuation exercise to determine a property's value in 2026. If a property is identified as being worth GBP2m or more, it will then be placed into one of four HVCTS bands.

"This exercise is separate from, and without reference to, existing Council Tax bands," the Government said. "Council Tax bands will not be used to determine eligibility for the surcharge and will have no bearing on a property's HVCTS band."

"As this charge is separate from Council Tax, current Council Tax bands will not be affected and will still apply. Equally, a change in Council Tax band will not affect eligibility for the surcharge," it added.

The HVCTS will be administered alongside existing Council Tax by local authorities, who will collect this revenue on behalf of central government.

The HVCTS will be a fixed levy, of GBP2,500 for properties valued between GBP2m and GBP2.5m; of GBP3,500 for properties valued therefrom up to GBP3.5m; of GBP5,000 for properties valued therefrom up to GBP5m; or of GBP7,500 for properties valued at over GBP5m.

The consultation will discuss a full set of reliefs and exemptions, as well as proposed rules for more complex ownership structures including companies, funds, trusts, and partnerships. The consultation will also cover treatment of those who are required to live in a property as a condition of their job (tied property).