By Igor Griskin
Published 25 May 2026
Reading time: 9 minutes
On 19 May 2026, the Treasury published its consultation on the High Value Council Tax Surcharge, the measure widely known as the mansion tax. Most of the coverage that followed focused on the headline surcharge, the sliding annual charge of £2,500 to £7,500 on properties worth £2 million or more, due from April 2028. That part of the policy was announced at the 2025 Autumn Budget and is not new.
What is new, and what received far less attention than it warrants, is a single question buried in the consultation document. The Treasury is asking whether non-UK resident owners of qualifying properties should pay an additional premium on top of the standard surcharge. The press has nicknamed this the "oligarch premium." For international owners of London property, and for international buyers considering a London purchase, this is the most important development of the year, and most of them have not yet registered it.
This piece sets out, plainly, what the proposed non-resident premium actually is, what it would cost, what is genuinely decided versus genuinely open, and what international owners and buyers should do during the consultation window, which closes on 14 July 2026.
This is general commentary from a property advisory perspective, not tax or legal advice. Owners with specific exposure should take advice from a qualified property tax specialist. What follows is the strategic frame.
What the standard mansion tax surcharge involves
Before the non-resident question, the baseline. The High Value Council Tax Surcharge applies, from April 2028, to residential properties in England valued at £2 million or more as of April 2026. It is a sliding annual charge, paid alongside council tax, in four bands.
Properties valued between £2 million and £2.5 million pay £2,500 per year. Properties up to £3.5 million pay £3,500. Properties up to £5 million pay £5,000. Properties valued above £5 million pay £7,500. All four bands rise annually with CPI inflation. The Office for Budget Responsibility estimates the measure will raise approximately £400 million to £430 million per year from 2028 to 2030.
The charge falls on the owner, not the occupier. This is a meaningful departure from standard council tax, which is generally paid by the tenant. For the mansion tax surcharge, the legal owner is liable, whether that is a freeholder, a long leaseholder, or a company where the property is company-owned. Joint owners are jointly liable. The Valuation Office, part of HMRC, is conducting a targeted valuation exercise during 2026 to identify which properties fall within scope, with the next revaluation scheduled for 2033.
None of this is in dispute. It is legislated, it is happening, and the consultation is about the mechanics of implementation rather than the principle. International owners of £2 million-plus London property should already be planning for the standard surcharge.
What the proposed non-resident premium would add
The genuinely new element in the 19 May consultation is a question, not yet a policy. The consultation document explicitly asks, and this is close to the actual wording of the GOV.UK document, whether the government should explore charging an additional High Value Council Tax Surcharge premium on non-UK resident owners of homes liable for the tax.
The reasoning the Treasury gives is housing-market pressure. The consultation states that in high-pressure housing markets, particularly London, there is interest in understanding whether demand from non-UK resident owners may be contributing to pressures on housing availability and prices. On that stated basis, the government says it is interested in exploring whether there is a case for an additional premium on non-resident owners.
Three things about the proposal matter for international owners.
First, the quantum is not specified. The consultation does not state what the premium would be. It could be a percentage uplift on the existing bands, a flat additional charge, or a separate scale entirely. Until the consultation closes and the government responds, the cost of the premium is genuinely unknown.
Second, the premium as described would apply on residency, not nationality. The consultation language addresses non-UK resident owners. A non-British citizen who is UK tax-resident would not be caught by the premium as currently framed. A British citizen who is non-UK resident would be. This is a residency test, not a nationality test, which matters considerably for how international families should think about their exposure.
Third, and this must be stated clearly to avoid alarm, the premium is not government policy. It is a question in a consultation. A Treasury official, quoted by the Financial Times, said directly: "We have not said we are going to do it." The proposal is a trial balloon, floated to gauge response. It may be adopted, diluted, or dropped entirely.
Why this matters even though it is only a proposal
If the non-resident premium is only a consultation question, why should an international owner act on it now?
Because the cost of a wrong assumption is asymmetric, and because the political direction of travel is real.
For a non-resident principal currently weighing a £5 million-plus London acquisition, the standard surcharge of £7,500 per year is a known, modellable cost. The non-resident premium introduces an unknown additional liability of indeterminate size, applying for the entire duration of ownership, on a property the buyer cannot easily exit if the cost proves unattractive. A rational buyer cannot simply ignore a proposal of this kind because it is not yet law. The proposal has to be modelled as a scenario, even if it is assigned a probability well below certainty.
The political context makes that probability non-trivial. The proposal emerged in the same month as a Labour leadership crisis in which the parliamentary party is visibly divided and the policy direction is, if anything, drifting leftward. Industry commentary has noted that proposals of this kind, council tax surcharges and capital gains reforms, are partly a product of that leadership uncertainty. A non-resident premium polls well, raises revenue from a politically unsympathetic group, and costs the government very little politically. Those are precisely the conditions under which a consultation trial balloon becomes policy.
The honest assessment is this. The non-resident premium is not certain, it is not quantified, and it may not happen. But it is a credible enough prospect that any non-resident owner or buyer of £2 million-plus London property should now model it as a scenario, and should consider responding to the consultation before it closes on 14 July.
Who is exposed, specifically
The proposed premium, as framed, would affect a defined group.
Non-UK tax-resident owners of London residential property valued at £2 million or more are the direct target. This includes a large share of the international ownership base in Prime Central London, where non-resident ownership of high-value stock is heavily concentrated.
Owners holding through offshore corporate structures face a related and compounding risk. The consultation explicitly asks about complex ownership structures, including companies, funds, trusts, and partnerships. International owners who hold London property through offshore SPVs should expect this area of the consultation, and the separate Asset Ownership Review expected this summer, to push toward greater transparency and potentially toward treating offshore-held property as presumptively non-resident.
Owners in the £2 million to £2.5 million band face the standard surcharge plus, potentially, the premium, on a property where the absolute charge is most material relative to value. This band is also subject to the bunching effect, where sellers price below £2 million to escape the surcharge entirely, and a non-resident owner in this band faces the weakest position in the market.
Who is not exposed, as the proposal is currently framed: UK tax-resident owners, regardless of nationality. A non-British citizen who is UK tax-resident would not face the premium. This is worth stating clearly, because the "oligarch premium" nickname implies a nationality test that the actual consultation language does not contain.
What the premium would mean for the PCL versus Surrey decision
One structural consequence of the proposal deserves specific attention.
The non-resident premium, if adopted, is a Prime Central London-concentrated risk. PCL has by far the highest concentration of non-resident-owned £2 million-plus stock in the country. The Surrey prime estates, Wentworth, St George's Hill, Virginia Water, and the surrounding prime addresses, are more domestically owned. Both PCL and Surrey would face the standard surcharge equally. Only PCL carries a heavy concentration of the non-resident ownership that the premium would target.
For an internationally mobile buyer choosing between a Prime Central London acquisition and a Surrey prime estate acquisition, the proposed premium widens the relative case for Surrey. This is not a recommendation to avoid PCL; the deep-value argument in Knightsbridge, Belgravia, and Chelsea remains real, with those postcodes trading 20 to 30 percent below their 2014 peak. It is an observation that the tax risk profile of the two markets has diverged, and that a non-resident buyer should now factor that divergence into the location decision.
What international owners and buyers should do before 14 July 2026?
Four practical steps.
First, model the premium as a scenario. Any non-resident owner or prospective buyer of £2 million-plus London property should ask their tax advisor to model the holding cost under three scenarios: standard surcharge only, standard surcharge plus a moderate premium, and standard surcharge plus a substantial premium. The premium quantum is unknown, so the modelling is necessarily a range, but a range is more useful than ignoring the risk entirely.
Second, review the ownership structure. International owners holding London property through offshore companies, trusts, or partnerships should have that structure reviewed now, ahead of both the consultation response and the summer Asset Ownership Review. The direction of policy travel on offshore ownership transparency is clear, and structures that were efficient under previous regimes may now carry disclosure and tax consequences that warrant restructuring.
Third, consider responding to the consultation. The consultation is open until 14 July 2026 and can be responded to via an online survey at the GOV.UK High Value Council Tax Surcharge consultation page. Owners with significant exposure, and the advisors who represent them, have a genuine opportunity to submit evidence on the practical and economic impact of a non-resident premium. Consultation responses do influence final policy design. An owner who is materially affected and submits nothing has chosen not to use the one formal channel available.
Fourth, for buyers specifically, factor the proposal into transaction timing. A non-resident buyer considering a £2 million-plus London acquisition has a decision to make about whether to transact before the consultation outcome is known, or to wait. There is no universally correct answer. Transacting now secures the property at current pricing in a soft market but accepts the premium risk. Waiting until after 14 July, or until the government's formal response, removes some uncertainty but accepts the risk that pricing, sterling, and supply all move in the interim. The right answer depends on the specific buyer, the specific property, and the buyer's view on the political trajectory.
The bottom line
The mansion tax surcharge itself is settled policy, and international owners of £2 million-plus London property should already be planning for an annual charge of £2,500 to £7,500 from April 2028. The non-resident premium is not settled. It is a question in a consultation, explicitly described by a Treasury official as undecided, and it may not happen.
But the proposal is credible enough, and the political direction clear enough, that no non-resident owner or buyer of high-value London property should now make a transaction decision without modelling the premium as a scenario. The consultation closes on 14 July. The window to understand the exposure, review ownership structures, and respond formally is open now and is not long.
If you are a non-resident owner of London property, or an international buyer weighing a London acquisition, and want a clear, calm assessment of how the proposed non-resident premium affects your specific position, you can reach Griskin at info@griskin.co.uk or +44 7427 533 006. Initial conversations are confidential and without obligation, in English or Russian.
