Mansion tax and leasehold flats

By Simon Dredzen, active in the prime central London property market for over two decades · Reviewed 8 November 2026

Most £2m+ homes in prime London are leasehold flats. Long leaseholders pay the mansion tax, and the details of a lease can make a large difference to a flat's value, and to its band.

Do leaseholders pay?

Yes, if the lease was originally granted for more than 21 years, or is treated in law as such. That is almost every flat bought on a long lease. It is the original term that decides whether you pay; the remaining term matters for value, because a shorter remaining lease usually means a lower price. The leaseholder pays, not the freeholder, and not a tenant renting the flat. See who pays the mansion tax.

Which leases count, and who pays when there are several

Under the Finance Bill, a "long lease" is one granted for a fixed term of more than 21 years (even if it can be ended early), a lease for life, or a lease with a right of perpetual renewal. If a flat has more than one long lease, for example a long sub-lease under a head lease, the tenant under the lowest long lease in the chain pays. If the flat is let on a shorter tenancy, the long leaseholder above it pays, not the tenant.

How a lease affects value

• Remaining lease length. A flat with a shorter lease is usually worth less than a similar flat with a long one, especially below about 80 years. Our checker assumes a long lease (roughly 90 years or more), so tell it if yours is shorter.
• Service charges and ground rent. High or rising charges reduce what buyers will pay.
• Floor level and access. Basement and lower-ground flats usually sell for less, and upper-floor flats without a lift are often worth less than similar flats with one.
• The building itself. Major works planned or under way, cladding or other building problems can all weigh on value.

An automated valuation model may not know your lease length or service charges. If it values your flat as though it had a long lease and no drawbacks, it can overstate its value.

Extending your lease? Keep a record first

Homes are to be valued as at April 2026, and the detailed valuation assumptions, including how later changes are treated, will be set out in regulations. If you extend your lease, keep a copy of the lease and its remaining term as it was then, with the date the extension completed. The same goes for any other change: note what changed and when.

The evidence that helps a leaseholder

• Your lease, showing its start date and term
• Recent service charge and ground rent statements
• Sales of flats in your building or street with a similar lease, floor and size
• An accurate floor plan: an overstated size is a common cause of overvaluation
• Notices of major works or building problems

For more, see how to record your home's 2026 condition.

Questions

More guides

• How much is the mansion tax?
• Who pays the mansion tax?
• How to record your home's 2026 condition
• Mansion tax appeal: how to challenge or appeal your band
• Mansion tax in Chelsea
• Mansion tax in Kensington

Sources: the HM Treasury consultation on the High Value Council Tax Surcharge (closed 14 July 2026), the government's publications on the surcharge, including its response of 28 October 2026, House of Commons Library briefing CBP-10934, and the Finance Bill (Part 3). The Bill sets the bands and who pays; the response confirmed the deferral criteria and exemptions. The valuation date, challenge process, interest rates and other details will follow in the Finance Bill 2026, regulations and guidance, and may change before April 2028. This is general information, not tax, legal or valuation advice.