A new tax will apply to residential property in England which is worth more than £2 million (based on the valuation in 2026) with effect from April 2028. The delay in the introduction will allow for a consultation to be held (including consideration as to how this will apply to properties held by companies, trusts, partnerships etc) and for the Valuation Office to undertake a targeted valuation exercise to identify the properties in scope.

The charge will depend upon the value of the residential property, starting at £2,500 (for properties exceeding the £2 million threshold) and raising to a maximum level of £7,500 (for properties worth more than £5 million).

It is suggested that this will apply to ‘homeowners’ rather than ‘occupiers’, which suggests that this will apply to investors who hold an interest in residential property as well.

It is proposed that this surcharge will sit alongside the existing council tax charged, that relevant properties will be revalued every five years and that the charges will increase in line with CPI inflation each year from 5 April 2029 onwards.

However, as we have seen with other property taxes (such as the annual tax on enveloped dwellings), once it is seen to work, the entry threshold has been brought down to capture more and more properties – only time will tell if the same approach is taken here.

If you would like to discuss this in further detail, please get in touch with your usual contact or e-mail us at experts@tacs.co.uk.