When will wealthy homeowners in England start paying a new annual tax on their expensive properties? The answer is April 2028, when the High Value Council Tax Surcharge takes effect across England.
This new tax targets property owners, not the people living in the homes. Think of it as an extra bill that arrives each year on top of regular council tax. The government announced this plan in the Autumn 2025 Budget, giving everyone time to prepare for the changes ahead.
The tax uses four different price bands to determine how much owners pay annually. Properties worth between £2 million and £2.5 million face a £2,500 yearly charge. Homes valued from £2.5 million to £3.5 million pay £3,500 each year. Properties between £3.5 million and £5 million cost their owners £5,000 annually. The most expensive homes over £5 million trigger the highest charge of £7,500 per year.
More than 100,000 households across England will face this new expense after property values get updated in 2028. London and Southeast England homeowners will feel the biggest impact since these areas have the most high-value properties.
Imagine paying an extra £7,500 every year just for owning an expensive home!
This idea actually started back in 2009 when politician Vince Cable first suggested it with a £1 million threshold. The concept evolved over many years before finally becoming official policy. The proposals faced significant political challenges, with Conservative resistance citing fairness concerns about annual property taxation.
Originally, proposals targeted homes worth £1 million, but the threshold rose to £2 million by 2012.
The English system differs notably from American mansion taxes. In places like New York and California, buyers pay large one-time fees when purchasing expensive properties. Unlike American systems that charge fees at purchase, the English tax represents cumulative profits that government expects from ongoing annual charges rather than one-time payments.
New York charges between 1% and 3.9% of the sale price for homes over $1 million. California’s Los Angeles adds 4% for properties over $5 million. The tax applies to all property types, including luxury condominiums and apartment units based on purchase price.
Property owners should check their home values carefully as 2028 approaches. Understanding which tax band applies helps families plan their budgets for this substantial new annual expense that specifically targets England’s most valuable residential properties.
