Prime London Council Tax bills to rise ‘up to 437%’

The government’s planned “mansion tax” – or High Value Council Tax Surcharge – could mean London home-owners face a massive 437% jump in their annual council tax bill, according to some analysis by Jefferies London.

The new levy on residences worth more than £2mn is due to come into play in April 2028, with a targeted revaluation of properties taking place before then (details on this process are very much TBC).

Jefferies London has crunched some numbers to estimate just how much extra PCL residents are likely to pay as a result. The firm checked the current cost of council tax across the highest level bands F to H in the capital’s core prime boroughs, then added the new annual surcharge amount to existing charges and across varying price thresholds.

At the very top end of the market, for homes valued above at £5mn, Westminster will see the biggest average increase in annual property taxes; the average council tax bill here will jump by 437%, from an average across bands F to H of £1,718 to £9,218.

£5mn+ homes in the City of London and Hammersmith & Fulham will also see chunky increases of more than 300% (349% and 306% respectively), while Kensington & Chelsea and Camden are in line for 200%+ jumps (283% and 211% respectively).

Even at the lower end of the surcharge thresholds, the potential increases remain substantial.

For homes valued between £2mn and £2.5mn, the average surcharge-driven rise ranges from 70% in Camden to 146% in Westminster.

Damien Jefferies, founder of Jefferies London: “The new mansion tax surcharge represents a major shift in the cost of owning a high-value home in London. When added to existing council tax, the increases are substantial, especially at the top end of the market where annual bills will now rise by several hundred percent.

“Prime buyers already shoulder the largest Stamp Duty Land Tax liabilities and the highest transaction costs. Adding such a significant recurring charge risks undermining confidence in a market that plays an important role in supporting the wider London economy. What the market needs is clarity and stability, not continual layering of new costs.”