Prime London homeowners face average council tax increases of up to 437% under the new mansion tax surcharge, warns Jefferies London.
This is following the introduction of the new mansion tax (High Value Council Tax Surcharge) with the largest average increases potentially climbing 437% for homes valued above £5m.
Jefferies London analysed the current cost of council tax across the highest level bands F to H in the capital’s core prime boroughs, before calculating how the newly introduced annual surcharge will raise yearly property tax when added to existing charges and across varying price thresholds of the prime London market.
The findings reveal that – at the very top end of the market for homes priced at £5m-plus – Westminster will see the highest average increase in annual property taxes, where the surcharge will see the current average council tax bill increase 437% – adding an average of £9,218 per year to the existing cost of £1,718 .
The City of London follows with an average increase of 349% while high-end homeowners in Hammersmith and Fulham will face average rises of 306 %. In Kensington and Chelsea, the average increase is 283%, while Camden will see average hikes of 211 %.
Even at the lower end of the surcharge thresholds, the potential increases remain substantial.
For homes valued between £2m and £2.5m, the average surcharge-driven rise ranges from 70% in Camden to 146% in Westminster.
Jefferies London says 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, particularly for buyers already facing the highest purchase taxes in the country.
A spokesperson says: “The surcharge represents a major shift in the cost of owning a high-value home in 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 percent.
“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.”
