Homeowners to get six months to challenge UK's new £2 million mansion tax

Homeowners in the UK will have roughly six months to contest the government's new £2 million mansion tax, set to take effect in spring 2028. The valuation methodology for determining which homes fall above the £2 million threshold is expected to be announced by year's end. Property owners will be informed next autumn if their homes are subject to the £2 million charge.

If they dispute the valuation, they will be given time to check and challenge the assessment before the tax becomes effective. The surcharge, called the high value council tax surcharge, varies depending on property value: £2,500 annually for homes between £2 million and £2.5 million, £3,500 for properties up to £3.5 million, £5,000 for properties between £3.5 million and £5 million, and £7,500 for homes worth more than £5 million.

The tax, proposed by former Chancellor Rachel Reeves in last year's budget, is projected to impact approximately 200,000 homes or 1% of properties, primarily in London and the southeast. John-Paul Marks, HMRC chief executive, revealed that 300 additional staff would be required within the Valuation Office to implement the tax. Committee chair Meg Hillier expressed concern that homeowners may receive inspections of their properties, including extensions, for valuations.

Marks assured that valuations will be conducted using AI and publicly available data, with inspections primarily at the homeowner's request to challenge decisions. HMRC stated that visits would be a last resort and only with the homeowner's agreement. HMRC has previously noted that inspections are necessary where "attributes can only be confirmed internally or a re-measurement is required."

Homeowners who "intentionally delay or obstruct" a valuation officer face a £200 fine, while failing to provide information without a "reasonable excuse" could result in a fine of up to £500. Critics, including the Conservatives' shadow housing secretary James Cleverly, argue that the tax represents an invasion of privacy, with tax inspectors potentially entering gardens and homes to justify the tax hike.

The government maintains that the tax addresses an unfairness, as a Band D home in Darlington pays more in council tax than a £10 million mansion in Mayfair. HMRC asserts that the Valuation Office possesses extensive experience in valuing domestic properties and will utilize a wide range of evidence to determine bandings.