The UK has confirmed the introduction of a new annual council tax surcharge for homes in England valued at £2m or more. The measure is officially called the High Value Council Tax Surcharge, and the first bills are expected to be sent in March 2028. The surcharge itself will come into effect from April 2028, and will be collected by local authorities alongside the existing council tax.
The liability will fall on property owners, not the people who live in them. Existing council tax bills will continue to be paid separately. The £2 million threshold was retained, after prior to the decision there was discussion of reducing it to £1.5 million.
Low income deferral
Households with an annual income of up to £35,000 or savings of up to £16,000 will be able to request a deferral of payment. This option will also be available where the home is the main home of a person with a disability or severe mental impairment.
The obligation will be able to be deferred until there is a change of ownership. The owner will be able to pay it earlier if they choose to do so. Additional rules are to be developed to specify the interest rates that will be charged on deferred amounts.
Which properties will be exempt
Specially built student halls of residence, homes for the elderly, long-term hospital care facilities, hospices and barracks of the British Ministry of Defence will be exempt from the surcharge. There will also be an exception for properties owned by sovereign states for diplomatic purposes, as well as for housing provided to people fleeing domestic violence.
Discounts will apply to farmhouses on active farms and to properties owned for charitable purposes.
Penalties and expected market impact
Owners who fail to provide requested information within 21 days may be subject to a penalty of 10% of their annual liability. If the information is not submitted within the next 21 days, the penalty will increase to 30%. Local authorities will be able to seek information from residents, managing agents and others, but there is no provision for a fine for them if they do not cooperate.
Nigel Bishop, of Recoco Property Search, said:
“The tax will make buyers think twice before making an offer for properties at or above the £2 million mark, which will result in these properties staying on the market longer.“He said the measure could increase supply at the top end of the price range and make it harder for homeowners who are planning to sell their large homes and move into smaller ones. The rules for appeal and the final administration of the new supplement are yet to be developed.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be found at imot.bg