Mansion tax news and updates

What has happened

• 28 October 2026

  Budget confirms the design: £2m threshold, deferral, exemptions and an empty homes premium

  At the Budget the government published its response to the consultation and confirmed the surcharge will go ahead from April 2028 on homes in England worth £2m or more in April 2026. The threshold was not cut. The four bands stay at £2,500, £3,500, £5,000 and £7,500 a year, rising with CPI inflation from 2029/30. The legislation is in the Finance Bill 2026-27, with regulations to follow.

  • Deferral: households can defer until the home changes hands if they meet any one of three tests: household income of £35,000 or less, savings of £16,000 or less, or someone in the household meeting disability criteria. Interest will be charged at a rate set in regulations.
  • Empty homes: a 100% premium, doubling the surcharge, on homes left substantially unfurnished and unoccupied for 12 months or more. See the empty homes premium.
  • Non-residents: the government decided against an extra charge for owners who live outside the UK, choosing the empty homes premium instead.
  • Exemptions: purpose-built student halls, care homes, hospices, long-stay hospital accommodation and Ministry of Defence barracks.
  • Discounts of up to 100%: other Ministry of Defence homes, diplomatic homes owned by a foreign state, registered social housing, domestic violence refuges, new builds still held by the developer, farmhouses on working farms and charity homes used to house people in need.
  • Challenges: 8 months from the start to challenge a band, 6 months for a new owner, and appeals to the Valuation Tribunal for England. Owners who do not supply information when asked face a penalty of 10% of a year's charge, rising to 30%.

  Some press reports, and the short GOV.UK factsheet, group these categories differently. We have followed the detailed list in the government's consultation response.

• 11 October 2026

  Press reports say the £1.5m cut has been ruled out

  The Sunday Times and the Financial Times reported that the Chancellor, John Healey, has ruled out lowering the threshold to £1.5m, and other outlets repeated the story. This is a press report, not an official announcement: the Treasury declined to comment, saying tax decisions are set out at fiscal events. The earlier talk of £1.5m was also press reporting rather than policy. The government's published plan remained £2m. The Budget on 28 October confirmed it.

• 28 September 2026

  Budget set for 28 October, threshold undecided at the time

  The government has not yet published its response to the consultation. The Times has reported that cutting the threshold to £1.5m is under active discussion in the Treasury, though sources have said no decision has been taken. Knight Frank estimates a £1.5m threshold would catch about three times as many homes as £2m. The Budget on 28 October is the next point at which the threshold, bands or timetable could change.

• 22 September 2026

  Richmond and Wandsworth count the cost of £1.5m

  Richmond upon Thames council said about 5,900 homes in the borough would pay at £2m and about 9,200 at £1.5m. Wandsworth council put its own increase at about 6,500 households, taking its total to around 12,500.

• 22 September 2026

  Sales are bunching just below £2m

  Tax Policy Associates found the share of sales priced just below £2m has risen about fivefold since the surcharge was announced, while the share at exactly £2m has roughly halved. It saw the same pattern at £3.5m. These are the 2026 sales the Valuation Office will value homes against.

• 21 September 2026

  Half of Kensington and Chelsea could pay at £1.5m

  Analysis by estate agents Hamptons, reported by The Telegraph, found around half of all homes in Kensington and Chelsea would pay at £1.5m, as would 24% of London's detached homes, up from 14% at £2m. Tax Policy Associates, reported by the Evening Standard, estimated that 61,787 more London homes would be caught, 144,104 in all.

• 16 September 2026

  Four London councils object

  Wandsworth, Richmond upon Thames, Westminster, and Kensington and Chelsea councils spoke out against the surcharge. They say their residents would pay around £275m a year, more than half the expected national total, and that the money would go to the Treasury rather than local services.

• 14 July 2026

  Consultation closes

  The eight-week consultation on the design and delivery of the surcharge closed. It covered valuation, liability, challenges and appeals, deferral, exemptions and discounts.

• Early July 2026

  First reports of a £1.5m threshold

  The Mail on Sunday reported that the threshold could be lowered to £1.5m. Tax Policy Associates estimated that would take the number of homes caught from about 123,000 to about 245,000. The Office for Budget Responsibility's estimate at £2m is around 165,000.

• 19 May 2026

  Consultation opens

  The Ministry of Housing, Communities and Local Government published its consultation on how the surcharge would work, alongside a written statement to Parliament. It proposed that owners, not occupiers, pay; that the Valuation Office publish a draft list in late 2027; an initial 8-month challenge window; and a deferral scheme for owners on lower incomes or savings.

• April 2026

  Valuation Office joins HMRC

  The Valuation Office Agency, which will carry out the surcharge valuations, became part of HM Revenue and Customs.

• November 2025

  Surcharge announced at the Budget

  The government announced a High Value Council Tax Surcharge on homes in England worth £2 million or more, from April 2028, in four bands from £2,500 to £7,500 a year, rising with CPI inflation. Owners would pay it on top of council tax.

What is still to come

• 2026 to 2027

  Finance Bill 2026-27 and regulations

  Parliament debates the legislation. Regulations then set the detail, including the deferral interest rate, the full exemption and discount rules and how estates are handled.

• Autumn 2027

  Draft list

  The Valuation Office publishes the homes in scope. Owners can ask for factual errors to be corrected.

• March 2028

  First bills

  Councils issue surcharge bills for 2028/29.

• April 2028

  The surcharge starts

  The initial 8-month challenge window runs from the start of the regime.

• 2033

  First revaluation

  Every home is revalued, with revaluations every five years after that.

Reported figures are the estimates of the organisations named, made on their own methods and time periods, and they differ. Some count sales, some count the stock of homes. None of them is an official count of the homes that will pay. The Office for Budget Responsibility's estimate is around 165,000 homes in 2028/29 at £2m.

Last checked against the government's Budget documents and consultation response on 30 October 2026. The surcharge is being legislated in the Finance Bill 2026-27 and is not yet law. Some detail is still to come in regulations.