"Adding such a significant recurring charge risks undermining confidence in a market that plays an important role in supporting the wider London economy"
- Damien Jefferies - Jefferies James
Prime London homeowners are set to see annual property tax bills increase dramatically following the introduction of the High Value Council Tax Surcharge announced in last week's Autumn Budget, according to research from Jefferies London.
The analysis shows that the largest average increases could reach an estimated 437% for homes valued above £5m. Jefferies London examined current council tax costs across the highest bands, F to H, in the capital's core prime boroughs. The firm then calculated how the new annual surcharge would affect yearly property tax when added to existing charges across different price thresholds in the prime London market.
At the top end of the market for homes priced at £5m and above, Westminster will experience the highest average increase in annual property taxes. The mansion tax surcharge will see the current average council tax bill increase by 437%, adding an average of £9,218 per year to the existing average council tax band cost of £1,718.
The City of London follows with an average increase of 349% for properties above £5m. High-end homeowners in Hammersmith and Fulham will face average rises of 306%. In Kensington and Chelsea, the average increase stands at 283%. Camden properties valued at £5m and above will see average increases of 211%.
Increases remain substantial even at the lower end of the surcharge thresholds. For homes valued between £2m and £2.5m, the average surcharge-driven rise ranges from 70% in Camden to 146% in Westminster. All prime boroughs recorded significant jumps in annual council tax.
The scale of these increases demonstrates the extent to which the surcharge changes the long-term cost of owning a high-value property in the capital, according to Jefferies London. This comes as buyers already face the highest purchase taxes in the country.
"The new mansion tax surcharge represents a major shift in the cost of owning a high-value home in London," said Damien Jeffries, founder of Jefferies 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 per cent. 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."
