Mansion Tax: What is the high value council tax surcharge on homes over £2m?.

If you could hear the Chancellor’s Autumn 2025 Budget speech over the jeers and cheers from both benches, you’ll know that tax was very much on the agenda as Rachel Reeves laid out her plans to reduce the UK’s debt and generate funds for investment.

One of the headline announcements, and one that we definitely listened out for as it could have a big effect on the property market, was the ‘Mansion Tax’.

What is the ‘Mansion Tax’?

The high value council tax surcharge will see homeowners and landlords with properties worth over £2m pay an extra annual fee on top of their standard council tax bill.

Although pre-budget predictions speculated that the surcharge could be as much as 1% of a property’s value, it will actually be a flat rate fee between £2,500 and £7,500.

Here’s how much extra homeowners will need to pay on top of their council tax per year based on the value of their property.

When does the ‘Mansion Tax’ come into effect?

Rachel Reeves confirmed that the higher council tax surcharge (Mansion Tax) would come into effect in 2028. Two years may seem a long time, but the delay is for good reason.

Currently, council tax is based on the estimated market value of a property on April 1^st, 1991 (yes, a whole 35 years ago) so the prices don’t accurately reflect prices now. For example, a property may have benefited from being in an urban regeneration area, close to new transport links, or near a high performing school. Or, the value may have increased due to renovations and improvements carried out on the property, such as an extension or conversion.

So, the Valuations Office Agency will look at all properties in the top three council tax bands (F, G and H) during 2026 to see which properties are now worth over £2m and subject to the surcharge.

Who will the Mansion Tax affect the most?

As soon as the budget was announced, we canvassed the opinions of 2,000 adults across the UK* to find out what they really thought about the mansion tax, with over a fifth (21%) saying the new tax was unfair.

Here are some of the groups that’ll be most affected:

• Millionaires – The first group that many think of when talking about mansions are the successful business people and those with generational wealth that can afford luxury residences. But, whilst they may be able to afford the council tax increase, many will see it as another cash grab against high net worth individuals. This could potentially add to the wealth exodus the UK is currently seeing, with approximately 16,500 UK based millionaires expected to have left the country in 2025 alone.


• Property landlords – The surcharge will be paid by the owner of a property so Buy to Let landlords with high value properties, including HMOs, will be affected. Tenants will still be required to pay the standard council tax.


• Londoners and the South East – Research by real estate experts JLL shows that 68% of UK properties valued above £2m are in London and the South East region so the surcharge will disproportionately hit homeowners living in these areas, including many middle-class families already paying mortgages.

• Home improvers – Homeowners that have invested into their properties might have inadvertently added enough value to place their home above the £2m threshold.


• Pensioners – Another group that could feel the impact of increased council tax charges are older homeowners that may have bought their properties decades ago when values were much lower.

“Those hit hardest will be ‘empty nesters’ and people who bought their property decades ago simply as a family home, not as an investment,” says Scott Clay, Director at Together Premier, our concierge division. “Asset-rich but cash-poor older homeowners could really struggle, as this tax could be equivalent to an entire year’s state pension.”

What can ‘asset rich, cash poor’ homeowners do to avoid or minimise the Mansion Tax?

As Scott points out, some of the people that will need to pay the extra council tax don’t actually have the money coming in, through their employed income or pensions, to pay it.

So, what options do ‘asset rich, cash poor’ homeowners have?

Move to a comparable sized property in a less expensive area

Relocating from high-value regions like London or the South East to areas where property prices are lower could immediately place the homeowner’s property value below the Mansion Tax threshold, without settling for less space.

Downsize to a smaller property

Selling a large home and moving to a smaller one (or downsizing) is the most direct way to cut costs and free up equity. It could also be an ideal solution for older homeowners stuck in high value family homes long after their children have left.

How could a bridging loan help?

For homeowners looking to relocate, whether to a comparable property in a less expensive area or to downsize, timing is everything.

Selling a high-value home could take months, and waiting for the sale to complete before buying a new property could mean missing out on the ideal home.

A bridging loan provides short-term funding to cover the purchase while you wait for your existing property to sell. This flexibility allows you to move quickly, secure a property below the Mansion Tax threshold, and avoid paying the surcharge on your current home for longer than necessary.

At Together, we can tailor bridging finance to high-value transactions, ensuring a smooth transition without disrupting your plans. Speak to our team to see how we can help you.

*The research was conducted by Censuswide, among a sample of 2000 Nationally representative adults. The data was collected between 26.11.2025 - 28.11.2025. Censuswide abides by and employs members of the Market Research Society and follows the MRS code of conduct and ESOMAR principles. Censuswide is also a member of the British Polling Council.