The tax authorities in the UK are to send inspectors to high-value properties to determine that owners pay a new wealth tax on its value.
HMRC will deploy valuation agents with the ability to demand entry to assess whether homes are worth over £2 million ($2.6 million) and so come under the high-value council tax surcharge, commonly known as the mansion tax.
The levy was introduced by former chancellor Rachel Reeves in last year’s budget and is due to take effect in April 2028, after a consultation ended in July.
Owners would be expected to pay £2,500 a year for properties worth £2 million to £2.5 million, and £3,500 for properties worth up to £3.5 million.
Properties between £3.5 million and £5 million would incur a charge of £5,000 annually, while those worth more than £5 million would face a £7,500 levy. The surcharge is separate from the council tax and would rise annually with inflation.
The Valuation Office, which is part of HMRC and is responsible for assessing council tax bands for homes in England and Wales, says inspections will be required where “attributes can only be confirmed internally or a re-measurement is required”. It is believed the unit is in line for additional resources to help it take on the new drive to raise extra revenue.
The opposition Conservative Party pointed out that the Valuation Office has hired an extra 493 staff over the past year, which they say is in preparation for a campaign to enforce the new tax.
Inspectors will carry out assessments, including the size and architectural style of homes. They will also look at the number of bedrooms, bathrooms and storeys.
Anyone who “intentionally delays or obstructs” a valuation officer carrying out their duties faces a £200 fine, ministers have confirmed. Failing to provide information without a “reasonable excuse” could result in a fine of up to £500.
“Hard-working families and pensioners face the prospect of HMRC tax inspectors snooping around their gardens and inside their homes, to justify hiking taxes on them,” said James Cleverly, the party's shadow housing secretary.
“Even homes which are below the new tax thresholds face these intrusive checks, with the threat of criminal prosecutions and fines if people refuse.”
Campaigners for the surcharge argue that house prices in expensive parts of London, such as Mayfair and Knightsbridge, have become even more inflated due to the number of second homes or investment properties. Some have highlighted properties where the owners rarely visit to make an argument for freeing up housing stock for local buyers.
Against this is a softening of the UK's prime property prices in face of the rising taxes. Advocates for overseas-based property interests point out a proportion of the absent owners are UK-tied individuals who have retained property in the UK despite setting up lives abroad. Even if the properties are rented out, owners are liable for the new tax.
A government spokesman said visits would take place by prior agreement with the property owner and in line with official guidelines.
“The public understands that we are addressing a longstanding unfairness, where a Band D home in Darlington pays more in council tax than a £10m mansion in Mayfair. The Valuation Office has extensive experience valuing domestic property, and will use a wide range of evidence to determine bandings.”
