High Value Council Tax Surcharge In England and What Scottish Government Is Doing

30th November 2025

The government has announced that, from April 2028, it plans to introduce a new High Value Council Tax Surcharge (HVCTS) on owners of residential property in England worth £2 million or more.

A public consultation on details relating to the surcharge will be held in early 2026.

The surcharge will not be determined by current Council Tax bands, which are based on property values from 1991. For example, bands F, G and H will not be used to determine eligibility for the surcharge.

The Valuation Office Agency will carry out a separate, targeted valuation exercise to determine a property's value in 2026. If a property is identified as being worth £2 million or more, it will then be placed into one of four HVCTS bands.

This exercise is separate from, and without reference to, existing Council Tax bands. Council Tax bands will not be used to determine eligibility for the surcharge and will have no bearing on a property's HVCTS band.

As this charge is separate from Council Tax, current Council Tax bands will not be affected and will still apply. Equally, a change in Council Tax band will not affect eligibility for the surcharge.

More information is available in the High Value Council Tax Surcharge fact sheet -

The current Council Tax system was introduced in 1993. It taxes domestic property through eight valuation bands, based on property values in 1991. Local authorities set annual Council Tax levels and administer the tax, with support and exemptions available. In 2024-25, Council Tax raised £40.3 billion across England.

The High Value Council Tax Surcharge (HVCTS) is a new charge on owners of residential property in England worth £2 million or more in 2026, taking effect in April 2028. A public consultation on details relating to the surcharge will be held in early 2026.

Homeowners, rather than occupiers, will be liable to the surcharge and will continue to pay their existing Council Tax alongside the surcharge. Social housing will not be in scope.

The Valuation Office will conduct a targeted valuation exercise to identify properties above £2 million and therefore in scope. Fewer than 1% of properties in England are expected to be above the £2 million threshold. Revaluations will be conducted every five years.

Under the current system, the average band D charge for a typical family home across England is £2,280. That is £250 more per year than a £10 million property in Mayfair, based on the band H charge in the City of Westminster, currently pays. This surcharge will change that, implementing a significant reform to improve fairness within England's property tax system.

Properties above the £2 million threshold will be placed into bands based on their property value. Charges will increase in line with CPI inflation each year from 2029-30 onwards.

High Value Council Tax Surcharge charging structure.

Threshold (£m) Rate (£)
£2.0-2.5 £2,500
£2.5-3.5 £3,500
£3.5-5.0 £5,000
£5+ £7,500
The HVCTS will be administered alongside existing Council Tax by Local authorities, who will collect this revenue on behalf of central government. The HVCTS is estimated to raise around £430 million of revenue per year from 2028/29 to support funding for local government services. Local authorities will be fully compensated for the additional costs of administering this new tax. The government will undertake a new burdens assessment to ensure costs to local authorities are fully funded.

The government will ensure a support scheme is in place for those who may struggle to pay the charge. It is important this scheme is targeted at those who need it most. This will be a key area of consultation in the New Year.

The government will also consult on a full set of reliefs and exemptions, as well as proposed rules for more complex ownership structures including companies, funds, trusts and partnerships. The consultation will also cover treatment of those who are required to live in a property as a condition of their job (tied property).

Scottish Government will have to decide if it wishes to introduce similar changes in Scotland.

in Scotland there are ongoing proposals that move in a similar direction to the UK Government's "higher-tax on high-value homes" idea. But as of now, nothing exactly like the new English surcharge has been finalised. Here's a breakdown:

What Scotland is currently doing / considering — and how it lines up

The Scottish Government has recently published a consultation on changing the council tax system. One of the reform proposals is a new 12-band (or even 14-band) system, replacing the existing 8 bands. Under this plan, the highest-value homes — in the new top band(s) — would pay substantially more than under the current system.

Under one "progressive 12-band" scenario, owners of the most expensive homes could pay "around £1,600 more per year (relative to 2025-26 baseline)" under the new top-band rate.

This reform effort is partly driven by the fact that current bands are based on 1991 property values, which many consider long overdue for updating.

Also, separately, local authorities in Scotland already have expanded powers: they can charge a premium of up to 100% on council tax for second homes — a move introduced in recent years.

So in that sense — yes the principle of “higher tax on more valuable / more desirable properties” is being explored in Scotland.

What’s not yet in place — and key differences to the English plan

The proposals remain just that i.e. proposals. According to the government, the reform “won’t be complete in this decade.”

There is no guarantee that the “top band(s)” will target ultra-high value homes (like the £2 million+ threshold in the new English surcharge). The draft models talk in broad “top band / highest-value home” terms but don’t yet define property-value thresholds in real-terms.

The reform is not (currently) a separate surcharge on top of existing council tax; rather it's a restructuring of bands and rates. So it’s a different mechanism than the English “surcharge + revaluation” plan.

The government has been cautious: ministers have declined to commit to a specific reform model, waiting instead to see if there’s broad agreement via the consultation process.

Comparison with the England/UK plan

The recent UK-wide proposal (to apply a “High Value Council Tax Surcharge” from 2028 on homes worth £2 million+) applies uniformly in England.

That surcharge is in addition to the existing council tax — it doesn’t replace the band system.

In contrast, Scotland’s reform ideas aim to revise the existing band structure and update valuations, not to add a separate surcharge (at least currently).

Scotland is considering more progressive property taxation — and that may mean higher bills for expensive homes in future. But there’s no fully formed plan yet that mirrors the scale or structure of the new English surcharge.