Highlights
- 300,000 of England's most valuable homes to face new surcharge on top of council tax bills.
- 2.4 m properties in bands F, G and H to be revalued over coming years.
- New tax will not be introduced until 2028, with deferral options available.
Chancellor Rachel Reeves is preparing to introduce a £600 million surcharge on hundreds of thousands of high-value homes, primarily affecting families in London and the South East, as she finalises plans to raise £25 bn in the upcoming Budget.
The Treasury will use the existing council tax system to revalue 2.4 m of the most valuable properties across bands F, G and H over the next few years, representing one in 10 English homes.
A separate surcharge will then be applied to 300,000 of the most valuable properties across these top three bands.
The move comes after Reeves abandoned plans to raise income tax. Treasury insiders claimed the proposal would not generate as much revenue as expected after the Office for Budget Responsibility reviewed it.
Impact and backlash
Labour insiders have characterised this as a "mansion tax", the levy will affect a portion of the 1.3 m middle-class families living in band F properties across England. These families could face annual levies of hundreds of pounds on top of existing council tax bills, which currently average £3,293.
Analysis by The Telegraph shows 26 of England's 296 local authorities will see more than a quarter of homes revalued. Over 15 per cent of all homes in London and the South East fall within scope.
Buckinghamshire would see more than 65,000 band F, G and H homes face revaluation, along with 59,000 in Westminster and 46,000 in Kensington and Chelsea.
Shadow chancellor Mel Stride accused Labour of engaging in "a class war against middle England". He added that If Starmer and Reeves decide to introduce a new tax raid on family homes, they will be punishing aspiration and hitting hard-working people.
The new levy would not be introduced until 2028, allowing time for homes to be reassessed by the Valuation Office Agency.
The chancellor is seeking to raise approximately £25 bn to plug a gap in public finances. The property tax raid is one of several measures alongside expected increases in gambling duties and levies on landlords.
A Treasury spokesman noted "We do not comment on speculation around changes to tax outside of fiscal events."
