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The Scottish government has announced proposals to nearly double the council tax on the country’s most valuable homes, potentially raising the annual charge to around £7,700. This so-called mansion tax would mean an increase of approximately £3,600 for properties valued over £2 million, while those worth between £1 million and £2 million could see their tax bills rise by about £720. Officials estimate these changes would impact roughly 15,000 properties, amounting to about 1% of Scotland’s entire housing stock.
Plans for this tax reform include the introduction of two new council tax bands. The existing system currently has eight bands, labelled A through H, with local authorities able to set varying rates across different areas. The proposed Band I would apply to homes valued between £1 million and £2 million, while Band J would cover properties worth above £2 million. Presently, homes in the highest category, Band H, have an average annual tax of about £4,051. Should the new scheme be implemented, Band I properties could face an increase to around £4,800 annually, and Band J properties could see bills reaching approximately £7,651.
The distribution of Scotland’s high-priced homes is uneven, with concentrations largely in urban centers such as Edinburgh and some rural locations. Data from Registers of Scotland reveal that, out of 391 properties sold for over £1 million in the 2024-25 period, more than half were located in the capital. To categorize homes into the new tax bands, the Scottish Assessors plan to conduct a “targeted revaluation” of all homes estimated to exceed £1 million in value. This process will update the existing council tax bands, which are currently based on property valuations from 1991.
Reforming council tax has received broad support across political parties, although there is no agreement on the precise approach. The Scottish government has engaged in consultations during the last parliamentary session but has yet to finalize specific plans. Any future changes will be negotiated through discussions involving local government. Deputy First Minister Jenny Gilruth stated, “Our approach to tax is based on fairness – asking the wealthiest among us to contribute a bit more.” She also pointed out, “As it stands, some multi-million pound properties have council tax bills that are not materially different from those faced by people living in far more modest homes.” Meanwhile, the UK government has also revealed intentions to implement a mansion tax on properties in England valued above £2 million
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