Tax
Real Estate

Leigh Sayliss
November 2025

Leigh Sayliss, Director and Head of Tax at Lawrence Stephens, is the chair of the Chartered Institute of Taxation’s Property Taxes Committee.

Following the budget announcement his comments were published here on the 26 November 2025.

Full text below:

New surcharge will add more complexity to property tax system

Commenting on today’s announcement of a high value council tax surcharge in England, Leigh Sayliss, chair of the Chartered Institute of Taxation’s Property Taxes Committee, said:

“This measure adds further complication to the current complex system of property taxation. There are already nine main taxes1 that you have to consider if you own property.

“Council tax is usually levied on the occupier whereas this tax will be payable by owners, including owners holding property indirectly through companies or trust structures, meaning that different people may taxed in relation to the same property.

“No tax is popular with those who have to pay it, and dry tax charges2 such as this tend to be especially unpopular.

“A key question is whether ownership of a valuable property is being treated as a proxy for ability to pay as some who will receive a bill will be ‘asset-rich, cash-poor’ pensioners.

“Just because a house has high value does not mean the owner has significant equity in the property. Longer mortgage terms have become more common. Asset-rich, cash-poor individuals who have built up a deferred mansion tax alongside a mortgage could find themselves stuck when they might have otherwise downsized.  Particular attention will need to be given to deferral arrangements and the interaction with mortgages and lenders’ willingness to lend.

“Using a banding system, similar to that used for the Annual Tax on Enveloped Dwellings (ATED), will reduce the numbers of arguments on the value of properties as there will only be sensitivity where property values are close to a rate boundary.  However, it should be noted that the proposal includes the same ‘double inflationary’ measure that is included in relation to the ATED – each year the rate of the tax will increase by CPI and, as property prices increase, properties will move up into higher rate bands.

“When ATED was introduced, it only affected properties valued in excess of £2m – but then the threshold was reduced to £500k. This raises the question as to whether there is a risk of a similar “scope creep” in relation to this tax, once the principle has been adopted.

“It is welcome that the government has decided to delay the implementation of the charge until 2028, and that there will be consultation on the charge early in 2026 on the details of the reliefs and exemptions, the design of an appeals system, and the deferral and support mechanisms available. From an administrative perspective, a new tax, even if notionally tagged on to council tax, needs time and resource to set up in terms of guidance, collection, appeals process, etc.”

Notes

  1. Council tax, stamp duty land tax (land transaction tax in Wales and land and building transaction tax in Scotland), annual tax on enveloped dwellings, income tax, corporation tax, capital gains tax, inheritance tax, VAT and national insurance.
  2. A tax liability that is payable without any money generated to pay for it.