Published: Thursday 6 August 2026
Residents in four London boroughs could pay around £270 million under the Government’s proposed “mansion tax” – over half of everything the policy is expected to raise across the country.
The leaders of Kensington and Chelsea, Westminster, Richmond upon Thames and Wandsworth Councils have written to the Government urging it to pause and rethink the planned High Value Council Tax Surcharge. They warn that the tax would fall heavily on people who have lived in the same home for decades and have seen its value rise without any corresponding increase in their income.
The councils also challenge the Government’s description of the measure as a “council tax surcharge”, because none of the money raised would remain in the boroughs or support local services. They say it is, in effect, a national tax that would be collected disproportionately from a small number of London communities.
In a letter to the Government, the four council leaders said:
“A home is the centre of family life, not an untapped tax stream. Our residents have often lived in the same home for decades. They have raised families there, built communities and lasting connections, and in many cases have seen the value of their homes rise even as their incomes have stayed flat or fallen.
“It is simply wrong to assume that everyone living in these homes is wealthy. If the Government’s intention is to make the wealthy pay more, this is the wrong way to achieve it.
“This is a badly thought-out policy: one with limited revenue-raising ability, high implementation costs, and a hugely disproportionate impact on our residents.”
What does the letter say?
The letter, which was sent to the Chancellor, raises three specific concerns about the Government’s proposals:
- It is “disingenuous” to call the proposal a council tax surcharge when the money won’t be spent locally
- The deferral limit is far too low – it’s below the average salary for London and would mean that a couple on London Living Wage would face paying the tax
- The Government needs to provide clear guidance to councils on how it plans to implement the policy
Cllr Elizabeth Campbell, Leader of Kensington and Chelsea Council, said:
“I have brought together the leaders of four London boroughs that will bear the brunt of this tax because the scale and deeply disproportionate impact of these proposals cannot be ignored. Our residents alone could be forced to pay more than half of the national bill.
“This is not a tax carefully targeted at the very wealthy. It lacks nuance and will hit pensioners, families and long-standing residents whose homes have risen in value while their incomes have not. People should not be punished simply for staying in the communities they have helped to build.
“The Government is calling this a council tax surcharge, but our council will not keep a penny of it for local services. It is a national tax, disproportionately extracted from a handful of London boroughs, and it is badly designed, costly to administer and fundamentally unfair.
“We are speaking with one voice – the Government must pause, listen and think again.”
Cllr Robert Morritt, Leader of Wandsworth Council, said:
“Many people living in these homes are normal families, pensioners and long-time residents who have lived in the same property for years. They now face additional taxes simply because house prices have risen around them.
“This is an unworkable and misleadingly named policy. Government should be honest about it rather than presenting it as an extension of council tax.
“Wandsworth Council won't get to keep a single extra penny raised. This is an unfair attack on well-run councils like ours, with Wandsworth residents hammered to pay for those elsewhere.”
Councillor Gareth Roberts, Leader of Richmond Council, said:
“Many Richmond residents have lived in the same homes for decades, raised families, contributed to their communities and grown older locally and, in many cases, the value of their homes has risen dramatically, while their incomes and personal circumstances have stayed largely the same or even declined.
“What the Government is doing is adopting a quick fix approach to try to solve the broken system of Council Tax. If the Government is serious about addressing the issue of local government funding they need to reform the whole system; messing around with a blunt approach such as this helps nobody, particularly given that the entirety raised with this new tax will go to the treasury and not a penny will go to fund services here in Richmond.
“Essentially, the Government is seeing Richmond residents as cash cows that they can milk to fix funding gaps elsewhere in the country, irrespective of whether they can afford to pay this new tax.”
Cllr Paul Swaddle, Leader of Westminster City Council, said:
"Westminster does not support the surcharge, either in principle or design. It would fall especially heavily on Westminster, where high property values do not always translate into high household incomes, and it risks creating unfair outcomes for residents whose property value does not reflect their ability to pay, including long-standing residents in high-value homes, leaseholders, tenants who may see costs passed through rents, and homes that do not fit neatly into the Government’s assumed model of wealth."