Four London councils have written to Chancellor John Healey urging him to rethink the government’s planned mansion tax, warning that their residents alone could end up paying £275 million a year — more than half of the revenue the levy is expected to raise nationwide.
Wandsworth, Kensington and Chelsea, Westminster and Richmond councils sent a joint letter this week opposing the High Value Council Tax Surcharge, which will apply to homes valued at more than £2 million from April 2028.
One borough likened the policy to the infamous window tax of 1696, which led homeowners to brick up their windows to avoid payment.
Mansion tax: how the four councils say residents will be hit
The Office for Budget Responsibility estimates the surcharge will raise around £400 million a year across the UK. The four councils calculate that roughly £270–275 million of that — well over half — would come from their boroughs alone.
According to figures from the Institute for Fiscal Studies, cited by The Times, nearly 24 per cent of homes in Westminster and 30 per cent in Kensington and Chelsea are worth more than £2 million. In Wandsworth the figure is 4.4 per cent and in Richmond 6.1 per cent — all far above the national average of less than one per cent.
Under the planned bands, owners of homes valued between £2 million and £2.5 million would pay £2,500 a year; those worth £2.5 million to £3.5 million would pay £3,500; homes between £3.5 million and £5 million would attract £5,000; and properties valued above £5 million would pay £7,500 annually. Charges would be uprated with inflation each year.
The councils’ letter is blunt: “This is a badly thought-out policy: one with limited revenue-raising ability, high implementation costs and a hugely disproportionate impact on our residents.”
‘The worst-designed property tax since 1696’
Peter Graham, Wandsworth’s cabinet member for finance, said: “This is the most badly designed tax on properties since the one on windows, 330 years ago.”
The leaders of the four boroughs have each voiced their own objections. Cllr Robert Morritt, leader of Wandsworth Council, said: “We won’t get to keep a single extra penny raised, with Wandsworth residents hammered to pay for those elsewhere. Why should an additional tax on our residents’ houses, be spent so far from their homes?”
Cllr Gareth Roberts, leader of Richmond Council, accused the government of treating his residents as “cash cows that they can milk to fix funding gaps elsewhere in the country, irrespective of whether they can afford to pay this new tax”.
Cllr Paul Swaddle, leader of Westminster City Council, warned the surcharge takes too blunt an approach to wealth: “High property values do not always translate into high household incomes,” he said, adding that residents whose homes have simply risen in value over time, without any change to their actual earnings, could be unfairly caught out.
The councils also fear knock-on effects for renters, arguing that landlords hit by the tax will pass the cost on through higher rents, increasing pressure on local housing costs.
What the government says about the mansion tax
The Treasury says the surcharge is designed to correct a long-standing imbalance in the council tax system and that the money raised will help fund local services nationally, with support and exemptions available for those who struggle to pay. It expects the levy to raise around £430 million a year across England by 2030/31.
The government’s own independent forecaster has cautioned that the true amount raised is uncertain, since owners of homes near each price threshold may have an incentive to keep valuations just below the line. Around 84,000 homes across Greater London are thought to fall into the surcharge bracket, though the figure has not been confirmed by official valuations.
The joint letter also raises concerns about implementation, with the four councils warning of high administrative costs and calling for a fairer approach to be devised with the help of local government, so London residents do not face what they describe as a “disproportionate burden”.
The mansion tax was confirmed in the November 2025 Budget and is due to take effect in April 2028, with draft valuations expected to appear in late 2027. Whether the government’s plans shift in response to the four boroughs’ joint intervention remains to be seen.
Reporting based on The Times, LocalGov and Westminster City Council.
