The Truth Behind the Mansion Tax Valuation System - And Why It Matters

As London homeowners and buyers continue to digest the implications of the new High Value Council Tax Surcharge—informally dubbed a “mansion tax”—the Government has offered the first hints about how £2 million-plus homes will be valued ahead of the tax taking effect in April 2028.

At Winkworth, we understand how critical valuation methods will be for our clients, particularly in Prime Central and Prime Outer London, where a large proportion of homes exceed the £2 million threshold. Transparency around the process will become increasingly important as the implementation date draws closer.

Below, we break down the latest information from Westminster and what it could mean for London property owners.

How Will £2m+ Homes Be Revalued? Government Gives its First Clues

Last week, Conservative MP David Simmonds asked the Ministry of Housing for clarity on the process the Valuation Office Agency (VOA) will use to reassess high-value homes for the surcharge.

The Government’s answer—issued by Exchequer Secretary Dan Tomlinson—reveals that a detailed framework is still being developed, but some key elements are now confirmed.

Government Response: The VOA Is “Developing Their Approach”

Tomlinson stated:

“The Valuation Office Agency are developing their approach to the targeted valuation and will set out more details in due course, following the outcome of the Government’s consultation.”

He added:

“When valuing domestic properties, the VOA uses modern technology and industry standard techniques combined with freely available information including sales data, property attribute details and government records.”

This means the revaluation process is likely to blend:

• Recent comparable sale prices
• Digital property records
• Floor plans, size and attributes

• Technology-driven modelling (such as automated valuation tools)

This marks the first official acknowledgement of the methodology being considered.

Industry Concerns: Will There Be Enough Surveyors?

With tens of thousands of London homes expected to fall into the surcharge zone — particularly across Kensington, Chelsea, Westminster, Camden, Hammersmith & Fulham, and parts of Wandsworth — the question is whether the VOA can feasibly perform individual valuations.

A leading PCL estate agency chief recently highlighted:

• A shortage of qualified residential valuation surveyors
• The scale of properties needing revaluation
• The likelihood the Government will turn to index-based models rather than case-by-case inspections

His warning:

Using mathematical averages, such as ONS index data, can lead to inflated valuations, especially in heterogeneous markets like London where property types can vary dramatically within the same postcode.

This could result in some homeowners being assessed at higher values than a traditional surveyor-led valuation might produce.

Why This Matters for London Homeowners

The High Value Council Tax Surcharge will apply annually from April 2028, starting at:

• £2,500 a year for homes valued between £2m and £2.5m
• Up to £7,500 a year for homes valued above £5m

Because London contains the majority of affected homes, how the VOA values properties will determine:

• Who is pulled into the surcharge
• Where “price clustering” may occur just below valuation thresholds
• Whether certain homes face unexpectedly high tax bills
• How pricing dynamics shift between 2026 and 2028

For owners considering selling, extending, or remortgaging high-value homes, the new valuation approach could influence timing and strategy.