Owners of England's priciest homes are about to get some unwelcome visitors. HMRC valuation agents will, in some cases, call at properties in person to check whether they should be caught by the government's incoming "mansion tax." The tax itself is a political story. For insurers and brokers, the more useful story sits underneath it: a wave of official scrutiny is about to land on the part of the market that already has the worst underinsurance problem, and a plausible new opening for doorstep fraud.
The levy in question is the High Value Council Tax Surcharge (HVCTS), announced by then-chancellor Rachel Reeves at the November 2025 Budget and due to take effect in April 2028. It applies on top of existing council tax to residential properties in England valued at £2 million or more, with an annual charge running from £2,500 up to £7,500 depending on the property's value band, according to the government's own consultation document. That consultation closed on 14 July 2026, and the government's formal response, with final rules, has not yet been published.
Identifying which homes fall inside the £2 million threshold is a job for the Valuation Office, which became part of HMRC earlier this year. Agents will mostly work from existing data: comparable sales, planning records, council tax banding history. In a minority of cases, where attributes can only be confirmed internally, they may seek to inspect a property in person. Refusing access has reportedly been floated as a criminal offence carrying fines of up to £200, though the enforcement detail has not yet been confirmed in final legislation. Brokers advising clients on this should treat that particular point as provisional, not settled law.
The numbers involved have already shifted once. The House of Commons Library's briefing on the surcharge cites Office for Budget Responsibility analysis putting the number of affected homes at around 165,000 in the first year, well above the roughly 120,000 first pencilled in. The OBR forecasts revenue of £400 million in 2028/29, rising to around £435 million by 2030/31, and expects roughly one in five affected owners to appeal their valuation, with around four in ten of those appeals succeeding.
A £2 million-plus market valuation and a rebuild cost for insurance purposes are two different numbers, and mixing them up is one of the most persistent sources of underinsurance in the high-net-worth market. Recent data puts UK-wide underinsurance at around 70% of properties, insured on average for only about two-thirds of true rebuild cost, with listed buildings, extended homes and high-net-worth properties flagged as particularly exposed. Most standard and specialist buildings policies apply average-clause reductions in proportion to any shortfall, so a client who has just had their home revalued for tax purposes is a reasonable prompt for a separate conversation about whether the sum insured still reflects current reinstatement cost rather than an outdated market-value figure. A similar gap has already been showing up at the thatched and period-property end of the market, where purchase prices routinely undershoot the true cost of rebuilding.
Whenever a government body says it will send officials to people's homes, it hands fraudsters a script to copy. The Financial Conduct Authority maintains a public warning list partly because impersonation of regulators, tax officials and other trusted bodies is such a common route into someone's home, information or bank account. A homeowner who has read that HMRC "valuation agents" might call, and who is already anxious about a large new bill, is a plausible target for someone claiming to be exactly that. Brokers and insurers serving this segment have a straightforward piece of advice to pass on: genuine officials carry verifiable ID, HMRC will write to confirm any visit in advance, and anyone unsure should ring the department directly rather than let a stranger in. It's a small message, but it sits well alongside wider industry efforts to get ahead of impersonation-driven fraud.
For firms with a high-net-worth book, this is a reasonable trigger for a short client note. It could cover what the surcharge is and when it takes effect, how to spot a genuine valuation visit versus a scam attempt, and an offer to check whether the buildings sum insured is still tied to rebuild cost rather than sale value. There's no need to wait for the government's final response to the consultation. The valuation exercise itself, and the unease it's already causing among affected homeowners, is reason enough to have the conversation now.
