Prime London homeowners are set to see their annual property tax bills rise significantly following the introduction of the new mansion tax (High Value Council Tax Surcharge) in the Autumn Budget, according to Jefferies London.

They estimate that the largest average increases could potentially climb to 437% for homes valued above £5m.

Damien Jefferies, Founder of Jefferies London, said: “The new mansion tax surcharge represents a major shift in the cost of owning a high-value home in London. When added to existing council tax, the increases are substantial, especially at the top end of the market where annual bills will now rise by several hundred percent.

“Prime buyers already shoulder the largest Stamp Duty Land Tax liabilities and the highest transaction costs. Adding such a significant recurring charge risks undermining confidence in a market that plays an important role in supporting the wider London economy. What the market needs is clarity and stability, not continual layering of new costs.”

Westminster will see the highest average increase in annual property taxes, where the mansion tax surcharge will add an average of £9,218 per year to the existing average council tax band (F to H) cost of £1,718. 

The City of London follows with an average increase of 349% for £5m+ properties, while high-end homeowners in Hammersmith and Fulham will face average rises of 306%. In Kensington and Chelsea, the average increase stands at 283%, while in Camden, £5m+ homes will see average hikes of 211%.