Living in an expensive house in Britain will now cost you even more.
In a new annual tax announced by the Office of Budget Responsibility (OBR), homes worth more than GBP2 million (AED9.72 million), will be taxed with a High Value Council Tax Surcharge, and this will rise with inflation.
The rate starts at GBP2,500 (AED12,143) for homes valued in the lowest bracket of GBP2 million to GBP2.5 million (AED9.72-12.15 million) bracket, rising to GBP7,500 (AED36,430) for those in the highest band of GBP5 million (AED24.3 million) or more.
Announcing this in her Budget speech, Chancellor Rachel Reeves said the move would address “a long-standing source of wealth inequality in our country”. She added that “less than the top 1 per cent of properties” will be affected by the new tax.
The new council tax comes into force from April 2028 and is expected to raise GBP400 million in 2029-30, according to estimates from OBR, the country’s budget watchdog.
The OBR said owners of homes valued at over 2 million by the Valuation Office, in 2026 prices, will be liable for a recurring annual charge, which will be additional to existing local tax liability.
It is expected to hit more than 140,000 homes, a majority of them based in London and its neighbourhoods.
Reacting to the announcement, estate agent Savills told BBC that it was “probably the least worst outcome for owners of prime property”. It added that the impact on the housing market would be much less severe than if an ‘open-ended mansion tax’ had been introduced.
Follow us on
