How the new tax could work in practice
The government has launched a consultation on the proposed High Value Council Tax Surcharge (HVCTS), which is expected to come into force in England from 1 April 2028.

HVCTS will apply to owners of residential properties in England worth £2 million or more and will be payable in addition to existing Council Tax. It is estimated that fewer than 1% of properties will be affected.

The consultation provides further detail on how the surcharge is expected to operate in practice, including how properties will be identified, valued and placed into surcharge bands.

Here are some of the key proposals.

How will properties be valued?
The Valuation Office will carry out a targeted valuation exercise to identify properties that fall within the scope of HVCTS. Properties will then be allocated to one of four bands based on their value.

To determine a property’s value and corresponding band, the Valuation Office will consider the sale prices of comparable properties alongside other relevant property characteristics.

Properties will be revalued every five years, with the next valuation scheduled for 2033.

Properties built after April 2028 will be valued either when construction is completed or from the date they are first occupied.

Where a property has been significantly improved or altered, a revaluation will generally take place when the property is disposed of or at the next general revaluation, whichever occurs first.

What type of properties will HVCTS apply to?
HVCTS will apply to dwellings, defined as self-contained units of residential property used as living accommodation.

Mixed-use properties will be included where the residential element is distinct and self-contained.

Gardens, garages and private storage buildings that form part of the dwelling will also be included.

Who will be liable for HVCTS?
The surcharge will be payable by the legal owner of the property rather than the occupier.

If a property is jointly owned, the owners will be jointly and severally liable.

In some cases, the beneficial owner may be different from the legal owner. For example, trustees may hold legal ownership of a property on behalf of a minor who is the beneficial owner. In these situations, liability for the surcharge will remain with the legal owner.

The government has confirmed that trustees will be liable for the charge, including in bare trust arrangements.
The consultation also proposes that where a property is held under a long lease, the leaseholder rather than the freeholder will be liable for HVCTS. A long lease is one that was originally granted for more than 21 years, or is otherwise treated as such under the law. Where the lease does not meet this definition, the surcharge will fall on the freeholder.

Are there any exceptions?
A deferral scheme will be available for eligible individuals, allowing payment of HVCTS to be postponed until the property is disposed of.

Current proposals suggest the scheme will be available to those with income and capital savings below welfare system thresholds, and where the property is the main home of someone who is disabled or severely mentally impaired.
Certain property types may also qualify for exemptions or discounts.

How will HVCTS be billed?
The first HVCTS bills are expected to be issued in March 2028.

Local authorities will collect the surcharge in the same way as Council Tax. The default payment arrangement will be 12 monthly instalments, although 10 instalments can be requested instead.

Will there be a premium for non-UK resident owners?
As part of the consultation, the government is gathering information to assess whether an additional HVCTS premium should apply to non-UK resident owners of properties that are liable for the surcharge.

Can HVCTS be challenged or appealed?
Property owners who believe their property has been placed in the wrong band, or that it should not fall within the scope of HVCTS, will be able to challenge the Valuation Office’s decision.

Challenges can also be made where an owner believes they are not the liable person or that the surcharge has been calculated incorrectly.

If the outcome of a challenge is unsatisfactory, an appeal can be made to the Valuation Tribunal for England.

Consultation timeframe
The consultation will remain open until 14 July 2026. Full details of the consultation, including how to respond, are available on the consultation webpage.