If you are tax planning in Cheshire or Oswestry, forthcoming changes to property taxes are having an impact on the housing market. The new high-value council tax surcharge (HVCTS), also known as the ‘Mansion Tax’, is due to be introduced from April 2028.
As a result, many buyers and sellers are already repricing their homes under different thresholds in a bid to beat it. Such price ‘bunching’, in which buyers and sellers agree a deal just outside specific bands, is intended to help people avoid paying the levy.
The HVCTS is due to be charged annually at a fee of £2,500 on all homes in England valued at over £2 million. Higher charges will apply at tiers above £2.5 million, £3.5 million, and £5 million. This year, the Valuation Office is assessing which properties fall into each bracket, factoring in criteria such as sales or stamp duty data, home extensions or other structural changes made to people’s properties.
This is where ‘bunching’ comes into play. Researchers at leading estate agent Hamptons have found that the new tax has altered the market considerably. Following the last Budget, there was a year-on-year 5.6% increase in the number of properties entering the market on sale for £1.8 million to £2 million, whereas the number on sale for £2 million to £2.2 million dropped by 6.5%.
In England, council tax valuations have remained static since 1991, whilst property prices have continued to rise, albeit at different rates nationwide. The government has said that the HVCTS would “improve fairness” in the UK’s property tax system, and is considering a public consultation at some stage in early 2026.
