A range of new HMRC charges will apply to taxpayers
Senior officials from HMRC have shared details about a significant change to council tax. The tax bill you get for your property can vary greatly depending on where you live and the type of property you own.
Labour announced in the Autumn Budget 2025 that it would bring a High Value Council Tax Surcharge, also known as the ‘mansion tax’. Starting from April 2028, owners of properties valued at over £2million will be subject to an annual recurring charge in addition to their council tax bill.
The additional charge will range from £2,500 up to £7,500, with the highest charge applying to properties worth £5million or more. Jonathan Russell, chief executive of the Valuation Office Agency (VOA), recently spoke to MPs about the work going on ahead of the tax change.
The VOA is part of HMRC and provides valuations for approximately 28 million domestic properties in England and Wales. Mr Russell was asked how exactly the agency will carry out the valuations to determine who is liable for the charge.
‘We are looking at the data’
He explained: “We already have the basic valuation that we use to value properties for council tax banding, which was done in 1991. We are looking at the data we hold already to make sure that it is up to date and accurate.
“We will also be looking at open-source data from the Office for National Statistics and the Land Registry, sales data and stamp duty land tax data. We will be looking at those properties that are in the higher element of current banding because of property data and then seeing how that translates to other data, matching the two and coming up with a valuation.
We have already done some work on that.” He assured that the group will be contacting people about this work. Mr Russell said: “When we are doing the valuations, we will make sure that we are public about it.
“We will go out and tell people how we are doing the valuation and the criteria that we are using. At the end of the day, we want people to have confidence in the valuations that we produce.
“We do not want there to be appeals because that is in no one’s interest. We want to make sure we are open, transparent and clear about the data that we are using, how we have applied it and how we have come to the valuation.”
‘It requires legislation’
The agency chief added that the group will also take into account any changes to a property that could affect its valuation, such as if a house has been extended or divided into two. He said: “We look at that type of data.
“It is looking at the valuation, rather than in 1991, probably at a date this year, which has yet to be set because it requires legislation.” Mr Russell told MPs that estimates suggest around 200,000 properties will fall within scope for the new charge.
He explained that “a large number” of the properties will be located in London, the south east, and the east of England, while some local authorities will have none whatsoever. He was asked whether a significant number of properties would need to be revalued to determine if they reach the £2 million threshold.
The valuation expert responded: “We will probably look at houses that may have an indicative valuation of £1.5 million to make sure we are not missing anything. If houses are clearly above the upper level, which is £5 million, we will not spend too much time looking at those either.
“We will be looking at the ones in between those two levels to make sure we get the banding absolutely accurate. It is what we do. For example, every year we will value somewhere in the region of 200,000 houses that have been newly built. We do that anyway.
“We are valuing those built today at 1991. Within that 200,000, there will be some houses that meet the criteria for the high-value council tax surcharge.”
Regarding the question of how people can appeal the charge, he stated: “On the appeals process, it is probably worth pointing out that the process for the high-value council tax surcharge will require legislation and consultation. I know there are plans to do the consultation in the next few months.
“That consultation will look at, for example, reliefs, appeals, how you might challenge your council tax banding, the scope and complex areas around ownership because the billing will not be on the occupier; it will be on the owner of the property. Again, there will be consultation around that.
“That will include how you might appeal it. Again, that has not been set out yet. That is still a work in process.”
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