The government has unveiled plans to introduce four new council tax bands aimed at the top 1% of the most valuable residential properties in England. This initiative, announced during Budget 2025, includes a proposed High Value Surcharge on homes valued at £2 million or more, designed to address long-standing inequities in the council tax system, which has remained largely unchanged since 1992.
Labour hopes that the surcharge will generate additional funds to support local communities and public services nationwide by ensuring wealthier property owners contribute fairly. The consultation seeks public input on the surcharge’s design, including criteria for identifying and valuing eligible properties, and the mechanisms for billing and deferral options for those unable to pay immediately.
Dan Tomlinson, Exchequer Secretary to the Treasury, emphasized the aims of the reform: “A £10 million mansion in Mayfair should not be paying less council tax than an ordinary family home in Darlington or Blackpool. This change addresses historic unfairness, ensuring that those with the most valuable properties pay their fair share, thereby rebalancing the system and investing in communities across the country.”
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In addition to the surcharge framework, the consultation covers key operational details such as the appeals process, administration, and enforcement protocols. Properties subject to the surcharge will be assigned to one of four new valuation bands, with charges adjusted annually in line with Consumer Price Inflation (CPI).
Regular revaluations by the Valuation Office (VO) will occur every five years, with the next scheduled for 2033. Decisions regarding annual upratings of the bands will coincide with these revaluations and be determined by future governments.