- in United States
- with readers working within the Property industries
Despite the shock of the OBR leaking details of Rachel Reeves' plans early, one thing that didn't come as a surprise in the 2025 Budget announcement was the rumoured 'High Value Council Tax Surcharge' (HVCTS) - or Mansion Tax.
Council Tax is one of the largest sources of property-related tax revenue in the UK and, unfortunately, it falls disproportionately on those in less expensive homes. A typical family home pays more per year than a £10 million property in Mayfair.
And while these facts may be true, they are misleading. For one reason or another, Mayfair has managed to keep its Council Tax rates lower than the national average.
The real issue? Council Tax is still based on property values from over 30 years ago.
This new surcharge will be based on more up-to-date valuations, identifying properties worth £2 million or more. To put it into perspective, that's less than 1% of UK homes.
Here's my question. Why stop at £5 million?
If you really want "those owning the highest-value properties to contribute more" and have already decided to have an increasing scale of surcharge from values £2 million to £5 million; then why would you stop there?
We have seen plenty of transactions at the level of £10 million, £25 million, and so on; and as house prices remorselessly seem to rise, there will be more.
Is it beyond the bounds of possibility that at the next "fiscal event" the Chancellor will extend the new bands and impose higher surcharges on even higher values?
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