Who pays

Who pays the mansion tax?

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

The mansion tax is charged on homes in England worth £2m or more in April 2026. It is paid by the owner, not by whoever lives there. Here is who counts as the owner, and who may be exempt or able to defer.

The owner pays, not the tenant

Freeholders who own their home outright pay.
Leaseholders pay if their lease was originally granted for more than 21 years, or is treated in law as such. That covers most flats in prime London. See mansion tax and leasehold flats.
Companies pay for homes they own.
Trustees pay for homes held in trust.
Joint owners are jointly and severally liable: the council can ask any one of them for the full amount.
Home purchase plans (for example Islamic finance), where the bank owns the home and you occupy it under a shorter lease: you pay, not the bank.
Tenants don't pay. If you rent your home on a shorter tenancy, the charge falls on the owner.

It applies to second homes too: what matters is the value and who owns the home, not whether you live there. Homes left substantially unfurnished and unoccupied for 12 months or more will pay a 100% premium, doubling the charge.

Councils will ask owners to confirm who they are

From March 2028, councils will send the bills. They can use Land Registry records and ask the people they believe own a home to confirm their details. Not replying within 21 days can mean a penalty of 10% of the year's charge, rising to 30% after a further 21 days. Managing agents can be asked too, and penalised if they don't respond.

Exemptions and discounts

The government confirmed in October 2026 that these will be exempt (not valued at all): purpose-built student halls of residence; care homes, long-stay hospitals and hospices; and Ministry of Defence barracks.

These will get a discount of up to 100%, applied for through the council: other armed forces housing; diplomatic housing owned by a foreign state; homes owned by registered social housing providers; refuges; new builds still owned by the developer (until first sale, or 12 months after completion); farmhouses and farmworkers' homes on working farms; and charity-owned homes used for people in need. The full list and definitions will be set out in regulations.

Deferral for some owners

The government has confirmed it will let some owners defer payment: households with income of £35,000 or less, or savings of £16,000 or less (in line with pension-age Council Tax Support), or where someone in the household meets disability criteria and it is their main home. Payment is put off until the home changes hands, or earlier if you choose to settle. Interest will be charged, at a rate to be set in regulations. The scheme is aimed at households, so company-owned homes are not expected to qualify.

If you don't think you should pay at all

If the question is whether you are liable, for example because you are not the legal owner, that goes to your local council. There is no time limit for this, though you will need evidence, and the council is proposed to reply within 2 months. If you accept you're liable but think your home's value or band is wrong, that is a challenge to the Valuation Office: see mansion tax appeals: how to appeal your band.

Is your home over £2m?

Your band depends on your home's value in April 2026. Our free checker estimates it from local sales in under a minute.