Council tax surcharge plan leaves landlords uncertain

Landlords do not yet know whether they or their tenants would be responsible for paying the proposed High Value Council Tax Surcharge.

Now Propertymark is calling for the liability rules to be clarified before the charge is introduced.

It argues that the government has not fully considered the effect on landlords or the supply of high-value homes to rent.

The proposed surcharge would apply to residential properties in England valued at £2 million or more from April 2028.

Fewer than 1% of homes are expected to fall within its scope, representing an estimated 165,000 properties.

Landlords should not be liable

Propertymark says landlords should not automatically be made liable simply because they own the property.

Instead, the professional body wants owners to be allowed to decide whether they or their tenants will pay.

That will, it adds, reflect the flexibility available under existing council tax arrangements.

The proposal does not currently establish that landlords must pay the surcharge when a home is let.

Liability remains one of the issues being considered through the government consultation.

Possible landlord consequences

Propertymark said the possible consequences for institutional landlords and the availability of high-value homes had not been examined fully.

Valuing the properties presents another difficulty.

Many homes worth more than £2 million have not changed hands for several years, making it harder to establish an accurate current value.

Propertymark warns that online estimates and estate agency appraisals would not provide a sufficient basis for imposing the charge.

It said a full inspection by a qualified surveyor would be needed to determine the value of an affected home.

However, there may not be enough qualified valuers available to inspect about 165,000 properties before April 2028.

Questions to be answered

Local authorities would also need additional funding, staff and specialist expertise to oversee valuations, collect payments, handle challenges and enforce the surcharge.

Propertymark supports allowing eligible homeowners to defer payments, although it wants the proposed income and savings thresholds reviewed.

It said this would help protect people on lower incomes who live in valuable homes but may not have enough readily available money to meet the charge.

The organisation also backs exemptions and discounts for specialist accommodation, including purpose-built student housing, care homes and refuges for people escaping domestic abuse.

It has opposed a further surcharge for owners who are not resident in Britain.

Propertymark argues that an additional charge could discourage international investment in England’s high-value housing market.

The organisation said the government must settle questions covering valuation, liability, enforcement and council resources before introducing the surcharge.