Being ready for the High Value Council Tax Surcharge

Council Tax can already be a pain, varying in what each band is being charged between different local authorities. For more information about how council tax needs to be considered in conveyancing, please see here.

However, there is a new upcoming consideration – the High Value Council Tax Surcharge. This new measure is apparently envisioned as a means to raise revenue for local authorities with the imposition of a surcharge on properties worth £2 million or more in 2026. This surcharge would be charged in addition to the Council Tax already charged on a given Property, but the surcharge will be payable by the property owner (as opposed to its owner or occupier). 

As this new charge is based on the value of a property in 2026, it is worth bearing in mind that if a property comes down in value in subsequent years, the property may still attract the surcharge depending on how properties are valued and how the new system is rolled out. The Valuation Office will be involved in ascertaining which properties will be subject to the surcharge, while Local Authorities will be administering the surcharge.

While local authorities administer Council Tax, setting the rate at which Council Tax is charged for each band A-H in their area, the rate of this new surcharge will be set by central government under current plans. This makes the High Value Council Tax Surcharge a considerable step towards improving perceived fairness in England’s tax system. The rates charged under the surcharge will incrementally increase according to property value thresholds under the current plans, meaning that a property valued between £2 million and £2.5 million will be charged a rate of £2,500. Properties worth between £2.5 million and £3 million are intended to be charged £3,500 in surcharge. 

In my earlier post with respect to the implications of Council Tax I highlighted the importance of planning and budgeting for this expense. From 2028, however properties falling within the scope of the new surcharge will face an additional outgoing. As the surcharge will be charged to owners, unoccupied high value properties would present as a nasty shock if this has not been considered! 

If you’re unsure how the High Value Council Tax Surcharge could affect your transaction or long‑term ownership plans, contact Joshua Kingston in our Residential Property team. He can guide you through what this new charge means in practice and how best to factor it into your conveyancing process.