£2m home? A new annual property tax of up to £7,500 is planned
The 30-second summary
From April 2028, England plans a High Value Council Tax Surcharge for residential homes valued at £2 million or more. The proposed annual bands are £2,500, £3,500, £5,000 and £7,500, on top of ordinary Council Tax. The measure is announced for Finance Bill 2026–27; valuation, discounts and deferral details matter.
- England only, proposed from April 2028.
- Four annual bands range from £2,500 to £7,500.
- Owners pay this in addition to ordinary Council Tax.
Applies to: England only; owners of qualifying residential property valued at £2 million or more.
Check original government sources
Example in numbers
Proposed annual surcharge by 2026 property valuation
- £2m to under £2.5m
- £2,500
- £2.5m to under £3.5m
- £3,500
- £3.5m to under £5m
- £5,000
- £5m and above
- £7,500
England only, planned from April 2028. Annual charges are in addition to existing Council Tax and subject to the final rules.
How much is the new £2 million home surcharge?
The government published four annual amounts: £2,500 on properties valued from £2 million to under £2.5 million; £3,500 from £2.5 million to under £3.5 million; £5,000 from £3.5 million to under £5 million; and £7,500 at £5 million or more. This sits on top of standard Council Tax.
The Valuation Office will carry out targeted valuations. The new policy is based on qualifying 2026 values and may not be identical to a current estate-agent asking price.
Will tenants pay the additional charge?
The government says the owner, rather than the occupier, will be responsible for this surcharge. Ordinary Council Tax liability is a separate question. Legal and tenancy arrangements should not be inferred from the headline alone.
Are discounts and deferrals available?
The government's October 2026 announcement indicates a deferral scheme plus discounts and exemptions. The full operational details need checking when regulations and guidance are finalised; do not assume eligibility without those rules.
What should owners do now?
Monitor the final legislation and valuation rules, consider potential annual holding costs in purchase decisions and avoid assuming every high asking price is an official valuation. This is a future measure, not a surcharge already being billed in 2026.
Frequently asked questions
When does the £2m property surcharge begin?
The announced start date is April 2028 in England, subject to legislation.
Is the surcharge in addition to Council Tax?
Yes. The published policy describes an annual charge on top of existing Council Tax.
Do tenants pay the high-value council tax surcharge?
The announced owner liability means the owner is responsible for the surcharge; ordinary Council Tax rules remain distinct.
Official sources and fact-checks
Information has been checked against the following original publications. Announcements may change before legislation is enacted.
- HMRC: High Value Council Tax Surcharge impact note(28 October 2026)
- HM Treasury: High Value Council Tax Surcharge policy(Updated 28 October 2026)
What can you do next?
Explore a relevant MMG guide or calculator. Calculator assumptions may need updating when new rules take effect.