Revenue from the high value council tax surcharge will be used to ‘support funding for local government services', Budget documents have confirmed.
The documents said local authorities would collect the additional revenue on homes worth more than £2m in England from April 2028 – estimated to be more than £400m each year – on behalf of the Government and would be ‘fully compensated for the additional costs of administering this new tax'.
They pointed out the typical family home across England currently paid more per year than a £10m property in Mayfair.
The charge, which will affect fewer than 1% of properties, will be based on updated valuations.
Charges, which will be levied on property owners rather than occupiers, will start at £2,500 per year, rising to £7,500 per year for properties valued at more than £5m.
The documents read: ‘Property is one of the most significant asset classes in which wealth is held in the UK. Although substantial revenue is raised from property-related taxation, the largest source of revenue, council tax, falls disproportionately on those in less expensive properties.
‘At the Budget, the Government is asking those owning the highest-value properties to contribute more.'
Chancellor Rachel Reeves said she wanted to ensure the ‘wealthiest contribute the most'.
