How will the “mansion tax” affect me?

If you own a high value home in the BR6 post area, especially one whose market value is in the region of £1.8 million or more, the new property tax regime unveiled in this weeks Budget, deserves your close attention. The government has confirmed that from April 2028 a new levy called the High Value Council Tax Surcharge (HVCTS), more commonly referred to as the “mansion tax”  will apply to properties in England valued at more than £2 million.

Here’s what it means in practice and why many owners in Chelsfield Park should take notice.

Under the new rules, if your home is valued at £2 million or more in 2026 (the valuation date the government will use for the charge), you’ll face an annual surcharge on top of your regular council tax. The surcharge is structured in bands, starting at £2,500 a year for homes in the £2.0–2.5 million range, rising to £3,500, £5,000 and ultimately £7,500 for properties in the highest band of £5 million+.

That means a “mansion tax” liability isn’t trivial. For example, a BR6 house currently worth around £1.8 million would strictly speaking sit just under the threshold, and so escape the surcharge. But values in hot suburban commuter-belt postcodes have been rising steadily in recent years. A modest valuation shift between now and 2026 could easily push a home into the £2 million-plus band, especially when neighbouring properties in the area are listed for far more.

The implications for the BR6 market are therefore material.  As of 28^th November, Rightmove is marketing 18 properties for sale in BR6 with asking prices over £1.7 million and a further 7 under offer or sold subject to contract. On top of that, since 1 January 2024 there have been 40 completions in BR6 with values between £1 million and £2 million, and 9 with a value in excess of £2 million. That shows there is already a meaningful stock of high-end homes and does suggest the new surcharge could affect a noticeable number of owners in the area.

For those whose homes are already over or close to the £2 million mark, the HVCTS effectively adds a recurring ownership cost. Unlike a one-off cost such as Stamp Duty, this is a recurring annual levy that will continue indefinitely, subject to re-valuation every five years to reflect changes in market conditions.

From a broader market perspective, the “mansion tax” is likely to inject a degree of caution into the upper end of the BR6 housing market. As other commentators have noted, high-value homeowners may slow down moves or rethink their long-term plans, especially if they are sensitive to ongoing outgoings. Less activity at the top end could dampen demand and place downward pressure on prices or at least reduce price growth over time.

On the other hand, some sellers may respond strategically, pricing properties just below the £2 million threshold to avoid the surcharge. This “bunching” effect could result in a flood of homes offered in the £1.8–£1.99 million band, which might increase competition among sellers and compress margins for those selling in that bracket. Given that many BR6 homes already cluster in that price range, this could create downward pressure on asking prices just under the threshold.

For existing owners, it would be wise to take stock now. If your home is near the threshold, you should consider what the surcharge would mean for your annual outgoings - and whether it might affect your long-term plans. The extra £2,500+ per year will matter over time, even if for many it won’t represent a “life-changing cost.”

Given the uncertainty over how valuations will be conducted, and the fact that a consultation and revaluation exercise is planned before full implementation, there is a real case for getting an up-to-date market valuation now, especially for homes in BR6 where property values have already climbed.

If you’d like a clearer sense of where your property stands in today’s market and what that might mean under the new “mansion tax” regime I’d encourage you to get in touch with us at Langford Rae Property Agents. We can provide a tailored valuation, assess your likely annual costs under HVCTS, and help you weigh up whether you should consider repositioning your home in the market sooner or later.

After all, in an uncertain and changing market, knowing exactly where you stand makes all the difference.