The Labour government has confirmed a new annual surcharge on high-value properties in England, set to commence in 2028, but with a notable exemption for social housing. This policy, often dubbed a 'mansion tax', will apply to tens of thousands of privately-owned homes valued at more than £2 million.
Details of the New Property Surcharge
From 2028, owners of private properties in England with a value exceeding £2 million will face an additional yearly charge on top of their existing council tax bill. The levy will be structured across four bands, with the minimum payment set at £2,500 for homes valued between £2 million and £2.5 million.
The charge increases progressively with property value, reaching a top rate of £7,500 annually for homes worth £5 million or more. Government documents, published on Wednesday, December 25, 2025, confirmed that the majority of properties affected are located in London.
The Social Housing Exemption Controversy
In a significant exemption, the government stated that "social housing will not be in scope" for the new charge. Analysis by The Telegraph, using property sales data and EPC ratings, has identified that this exemption applies to more than 110 social housing homes across England that are valued at over £2 million.
This decision has sparked immediate political criticism. James Cleverly, the Conservative shadow minister for housing, labelled the policy a "new family homes tax" and an attack on aspiration. He argued it unfairly taxes hard-working homeowners while allowing residents in high-value social housing, funded by the taxpayer, to avoid the charge.
Political and Public Reaction
The policy has drawn strong reactions from various quarters. John O’Connell, chief executive of the Taxpayers’ Alliance, stated: "Nobody should be socially housed in a property worth more than £2m." He highlighted the disparity with millions of families struggling with mortgages and rents on far less valuable properties.
Meanwhile, the Local Government Association has called for closer collaboration with the government to address practical implementation concerns. Councillor Pete Marland, chair of the association's resources committee, warned that the surcharge "should not create confusion over accountability," with councils potentially being blamed for a levy they do not control. He reiterated the need for comprehensive and fair reform of the wider council tax system.
