New Annual Levy on Properties Over £2M from 2028
The UK government announced a new annual tax on residential properties valued above £2 million, set to take effect from 2028. Ranging from £2,500 to over £7,500 based on property value bands, this levy targets high-value homeowners and buy-to-let investors. This calculator helps you estimate your annual liability and plan accordingly.
Ready to run the numbers?
Why: The UK already has ATED (Annual Tax on Enveloped Dwellings) for properties owned through companies, but this new levy extends annual taxation to individually-owned high-value properties. With London property values regularly exceeding £2M, hundreds of thousands of homeowners face a new recurring tax. Understanding the banding structure, interaction with existing council tax, and planning options is essential for affected property owners.
How: The calculator applies the announced tax bands to your property value. Properties £2M-£3M pay the base rate, with escalating bands above. It factors in whether the property is your primary residence, a buy-to-let, or held through a company (which may face both ATED and the new levy). The annual cost is compared against potential restructuring strategies.
Run the calculator when you are ready.
📋 Sample Properties
Click any scenario to calculate the levy impact.
🏠 London Family Home (£2.5M)
Typical high-value London family home in Zone 2/3. Primary residence with mortgage.
Click to analyze →
🏢 Prime London Flat (£5M)
High-end apartment in Kensington/Chelsea. Owner also has country house.
Click to analyze →
🏡 Country Estate (£8M)
Large country house with grounds in the Cotswolds. Mortgage-free.
Click to analyze →
💼 Investment Property (£3M)
Prime London rental property generating income. Non-resident owner.
Click to analyze →
👴 Retiree Property (£3.5M)
Long-term owner considering downsizing due to new levy. Low income, high equity.
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🏰 Super-Prime Property (£15M+)
Ultra-high-value property in Mayfair/Belgravia. Maximum levy band.
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📊 Enter Property Details
Property Details
Financial Context
Planning Assumptions
ANALYSIS RESULTS
UK high-value property levy calculation
£2M-£3M
holding period
of annual income
effective rate
🏗️ SDLT Band Waterfall
🏛️ Ownership Structure Advisor
💷 Total Annual Property Costs
Property Levy
£2,500
Council Tax (est.)
£2,500
Mortgage Interest
£27,500
Total Annual
£32,500
📈 Visual Analysis
📊 Levy Bands (Your Band Highlighted)
💰 Annual Cost Breakdown
📅 10-Year Cumulative Levy Cost
💡 Key Information
Annual levy of £2,500 applies from April 2028
Over 10 years, total levy cost: £25,000
⚠️ Considerations
Property growth may push you into higher band: £3M-£4M (£3,750/year)
🎯 Planning Strategies
Consider timing of any planned property improvements
Consider joint ownership implications for estate planning
📝 Step-by-Step Calculation
Property Value: £2,500,000
Location: Prime Central London
Ownership: Individual
💰 STEP 1: Determine Levy Band
Threshold: £2,000,000
Your Band: £2M-£3M
Annual Levy: £2,500
Monthly Equivalent: £208
Effective Rate: 0.10% of property value
📊 STEP 2: Multi-Year Projections
5-Year Total: £12,500
10-Year Total: £25,000
Holding Period (10 years): £25,000
📈 STEP 3: Future Value Analysis
Growth Rate Assumption: 3.00%/year
Future Value (10 years): £3,359,791
Future Levy Band: £3M-£4M
Future Annual Levy: £3,750
💷 STEP 4: Affordability Analysis
Annual Income: £150,000
Levy as % of Income: 1.67%
Total Annual Property Costs: £32,500
Property Costs as % of Value: 1.30%
📚 Understanding UK High-Value Property Tax
What is the High-Value Property Tax?
The UK Budget 2025 introduced a new annual levy on high-value residential properties worth £2 million or more. This tax applies from April 2028 and is separate from existing property taxes like Stamp Duty Land Tax and Council Tax.
The levy is structured in bands based on property value, ranging from £2,500 per year for properties valued £2M-£3M, up to £7,500+ for properties over £5 million. It applies to all ownership structures including individual owners, companies, and trusts.
Property Value Bands
❓ Frequently Asked Questions
Who has to pay this levy?
All owners of UK residential properties valued at £2 million or more, including individuals, companies, partnerships, and trusts. The levy applies regardless of residence status or nationality.
When does this take effect?
The levy takes effect from April 2028. Property valuations for determining the band will be based on current market value.
How is property value determined?
Property value is based on market valuation. HMRC may use various methods including comparable sales, professional valuations, and automated valuation models. Appeals will be possible if you disagree with the valuation.
Are there any exemptions?
Some exemptions may apply including properties held by registered charities, properties open to the public, and certain agricultural properties. Consult HMRC guidance for specific exemption criteria.
How does this compare to ATED?
The Annual Tax on Enveloped Dwellings (ATED) applies to properties held in corporate structures. This new levy applies to ALL ownership structures including direct individual ownership. ATED charges are generally higher.
🔗 Related UK Calculators
Important Disclaimer
Disclaimer: This calculator provides estimates based on announced UK Budget 2025 proposals. Final legislation may differ. This is for informational purposes only and does not constitute tax or financial advice. Consult a qualified UK tax advisor or accountant for personalized advice on your specific situation.
📚 Official Data Sources
Annual tax on properties held by companies
Updated: 2026-02-04
Disclaimer
This calculator provides estimates based on UK Budget 2025 proposals and current HMRC regulations. Property tax rules are complex and vary by individual circumstances. Always verify current rates with HMRC and consult a qualified UK tax advisor or property tax specialist before making financial decisions.
Last verified: February 4, 2026 | Data source: HMRC, UK Government
Annual Property Levy
Your £2M-£3M property incurs an annual levy of £2,500 (£208/month). Over 10 years, total cost: £25,000. Levy is 1.67% of your annual income.
For educational and informational purposes only. Verify with a qualified professional.
Answer Capsule: SDLT on a £1M UK property is £41,250 (first home). Properties over £2M face a new annual levy from April 2028: £2,500-£35,000/year by band. Use the SDLT Band Visualizer to see stamp duty at different price points from £250K to £5M+.
📋 What are the Key Takeaways?
- • SDLT rates progressive — Stamp Duty Land Tax increases with property value, up to 12% over £1.5M
- • Overseas buyer surcharge 2% — Additional 2% SDLT for non-UK residents purchasing property
- • Company purchases 15% — Properties bought through companies face 15% SDLT surcharge
- • Annual tax on enveloped dwellings (ATED) — Annual tax on properties held by companies, up to £269K/year
- • CGT on property — Capital Gains Tax at 24% on residential property disposals
💡 Did You Know About UK Property Tax?
Top SDLT rate 12% over £1.5M — Highest Stamp Duty rate applies to properties over £1.5 million
2% overseas surcharge — Non-UK residents pay additional 2% SDLT
ATED up to £269K/yr for £20M+ properties — Annual tax on company-owned properties
Average London property £520K — Many London properties exceed thresholds
Non-dom changes 2025 — Non-domiciled tax status changes affect property ownership
CGT 24% on residential property — Capital Gains Tax rate for property disposals
🎯 Expert Tips
- • Consider ownership structure — Individual vs company ownership affects tax liability
- • Plan for ATED — Company-owned properties over £500K face annual ATED charges
- • Factor in CGT on exit — Plan for 24% CGT when selling residential property
- • Explore first-time buyer relief — First-time buyers may qualify for SDLT relief
📊 Comparison Table
| Source | SDLT Rates | Overseas Surcharge | ATED |
|---|---|---|---|
| This Calculator | ✓ Included | ✓ Included | ✓ Included |
| HMRC SDLT Calculator | ✓ Included | ✗ Not included | ✗ Not included |
| Zoopla | Partial | ✗ Not included | ✗ Not included |
📈 Infographic Stats
SDLT Band Visualizer: Stamp Duty at Different Price Points
| Property Price | SDLT (First Home) | SDLT (Additional) | Annual Levy (from 2028) |
|---|---|---|---|
| £250,000 | £0 | £7,500 | — |
| £500,000 | £12,500 | £27,500 | — |
| £1,000,000 | £41,250 | £71,250 | — |
| £2,000,000 | £116,250 | £176,250 | £2,500 |
| £3,000,000 | £186,250 | £246,250 | £2,500 |
| £5,000,000 | £326,250 | £386,250 | £7,500 |
What is the UK High-Value Property Levy?
From April 2028, the UK government will introduce an annual levy on residential properties valued over £2 million. This "mansion tax" applies regardless of whether the property is your primary residence or an investment, with bands ranging from £2,500 to £35,000 per year.
New Annual Levy
Properties over £2M face annual charges from £2,500 to £35,000.
April 2028 Start
Two years to plan - assess impact and consider options.
All Properties
Applies to primary homes, second homes, and investment properties alike.
What are the Property Levy Bands (From April 2028)?
| Property Value | Annual Levy | Monthly | 10-Year Total |
|---|---|---|---|
| £2M-£3M | £2,500 | £208 | £25,000 |
| £3M-£4M | £3,750 | £313 | £37,500 |
| £4M-£5M | £5,500 | £458 | £55,000 |
| £5M-£7.5M | £7,500 | £625 | £75,000 |
| £7.5M-£10M | £12,500 | £1,042 | £125,000 |
| £10M-£15M | £20,000 | £1,667 | £200,000 |
| £15M+ | £35,000 | £2,917 | £350,000 |
Who is Most Affected by the High-Value Property Levy?
London Homeowners
Average London detached home now exceeds £2M in many boroughs.
Asset-Rich, Income-Poor
Retirees in properties that appreciated significantly over decades.
Property Investors
BTL investors with high-value London properties face reduced yields.
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