The New £2m Mansion Tax Consultation: What Property Owners Need to Know Before 14 July
If you own a home in England worth £2 million or more, the government’s consultation on the new High Value Council Tax Surcharge closes on 14 July 2026. This is the main window to comment before the rules are finalised.
The surcharge, often called a mansion tax, is due to start in April 2028. It will apply to owners of residential property in England valued at £2 million or more in 2026. Annual charges will range from £2,500 to £7,500, depending on the property’s value band. It was announced at the 2025 Budget and is expected to affect fewer than 1% of homes. We also cover the High Value Council Tax Surcharge in more depth in a dedicated guide.
What the surcharge actually is
The surcharge will sit on top of existing council tax. It will be collected by local authorities alongside council tax, but the revenue will go to central government to support local government funding.
The Valuation Office will identify homes in scope through a targeted valuation exercise, using 2026 property values. Revaluations are expected every 5 years. The Treasury expects the measure to raise around £430 million a year from 2028/29. For the wider context, our summary of the UK Spring Budget 2026 sets out where this sits among recent property tax changes.
Who pays, and how much?
Liability sits with the owner, not the occupier. For rented homes, that means the landlord, not the tenant. Where a lease was originally granted for more than 21 years, the government proposes that the long leaseholder should pay. Otherwise, liability would generally sit with the freeholder.
Companies, trusts and other ownership structures are part of the consultation, so owners should not assume that holding property through a structure removes exposure. If you hold property through a company, our note on SPV versus personal ownership is worth revisiting.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
| Property value in 2026 | Proposed annual surcharge |
|---|---|
| £2 million to £2.5 million | £2,500 |
| £2.5 million to £3.5 million | £3,500 |
| £3.5 million to £5 million | £5,000 |
| Over £5 million | £7,500 |
Charges are expected to rise with CPI inflation from 2029/30.
How your property gets valued
The Valuation Office will use a targeted valuation exercise to identify homes worth £2 million or more. The consultation says the comparable method will be used, looking at sales of similar properties and adjusting for differences. The Valuation Office may also use property attribute data and other available evidence.
High-value homes can be difficult to value precisely because comparable sales may be limited. Keep clear records of your property’s value, any major works, ownership history and relevant local sales. A year-end checklist for property portfolios is a sensible habit.
If you think your banding is wrong, the proposed system gives homeowners an initial 8-month period to challenge it. After that, a standard 6-month challenge period would apply. Appeals would go to the Valuation Tribunal for England.
Why the 14 July deadline matters
The consultation is not just about whether the surcharge should exist. It asks important questions about how the rules should work, including liability, leaseholds, trusts, deferral, exemptions, discounts, appeals, enforcement and possible treatment of non-UK resident owners. You can read the proposals and respond on GOV.UK.
The proposed deferral scheme is especially important for asset-rich but income-poor owners. The government is consulting on a household income threshold of £35,000 or less and capital savings of £16,000 or less, with possible disability-based criteria as well. A specialist landlord accountant can help you understand how the proposals affect your position.
What you should do now
Start with a realistic view of your property’s likely 2026 value, especially if it sits near the £2 million threshold. Then think about cash flow, because this is a recurring annual cost, not a one-off. Our piece on planning for recurring costs is a good starting point.
If you let property, factor the surcharge into your personal tax returns for landlords planning and wider tax planning for property investors. For company-held or managed portfolios, commercial property accounting, residential property management support and an outsourced finance function can keep the numbers straight.
Frequently asked questions
Who pays the mansion tax, the owner or the tenant?
The owner pays. For rented homes, that means the landlord, not the occupier.
How much is the surcharge?
The proposed annual charge ranges from £2,500 to £7,500, depending on the value band, with CPI increases from 2029/30.
When does it start?
The surcharge is due to start in April 2028, based on 2026 property values.
Can I challenge my valuation?
Yes. The proposed system includes an initial 8-month challenge window, followed by a standard 6-month period, with appeals to the Valuation Tribunal for England.
Speak to us before the consultation closes
If you own or let high-value property and want to understand your exposure, talk to FHP Accounting. Our property tax accountants work with owners, landlords and investors as trusted Nottingham accountants, and we can help you plan for April 2028 well in advance. Call 0115 648 8686 or get in touch for a free consultation.
I lead FHP Accounting, an accountancy practice specialising in Commercial and Residential Property Accounting. Our goal is to make the administration of running property portfolios easier for landlords, managers, and investors — allowing you to focus on what you do best, while we take care of everything behind the scenes.
Need Expert Accounting Advice?
If you are unsure about tax, bookkeeping, payroll, property accounts or business finances, speak to the team at FHP Accounting for clear, practical guidance.
