Conservatives to abolish Labour’s Family Homes Tax

Today [Monday 5^th October 2026], Andrew Griffith MP, Shadow Chancellor, has announced that a future Conservative Government will abolish Labour's Family Homes Tax.

The Family Homes Tax, which Labour call a High Value Council Tax Surcharge, was announced by Rachel Reeves in her 2025 Budget, and is due to start in April 2028. It will add between £2,500 and £7,500 a year to the council tax bill of every home in England affected. Even the lowest band costs more than the average Band D council tax bill in England, which stands at £2,392 this year, so the surcharge alone will cost more than a typical family pays for all its council services. However, there have been recent reports that the threshold could be lowered even further.

To collect it, Labour are building an entirely new valuation system, separate from council tax, with homes revalued every five years. HMRC's mansion tax police' will be able to demand entry to homes and carry out inspections in a sinister assault on civil liberties. Councils will be forced to administer the tax but will keep none of the revenue, which goes straight to the Treasury. 

A Conservative Government will abolish the Family Homes Tax outright, and if Labour legislates before the election a Conservative Government will repeal it. The Family Homes Tax is an unfair tax raid on the homes people have worked hard for. It is a purely political and spiteful tax raid by Labour. The tax is expected to raise just £400 million a year compared to the over £50 billion a year raised by the council tax system. It adds huge complexity for very little gain in terms of overall revenue.

For families who cannot find the money, Labour's answer is to put a debt on the house. Households on £35,000 a year or less can defer the charge, but interest runs for as long as the debt is outstanding and the bill is secured against the home, to be settled when it is sold or passes on. Labour's costing assumes a third of households in homes worth £2 million to £5 million cannot pay from their income where the charge takes more than a tenth of it, and that some of them will simply have to sell up.

Abolishing the Family Homes Tax is a demonstration of our values. Labour is making home ownership more expensive, in combination with our plans to scrap stamp duty on primary residences, we will make it more affordable.

Conservatives believe in aspiration and hard work. The tax burden is high enough as it is without another punitive raid on families. Council tax is already soaring across the board, and now Labour have found another way to squeeze families for yet more cash.

Andrew Griffith MP, Shadow Chancellor of the Exchequer, said:

Labour have already come for the family farm and the family business. Now they are coming for the family home. 

People who have worked hard to buy their home and have lived in it for years will face huge tax bills, and many will have no way to pay. 

Labour's own figures say it will knock value off people's homes, and will raise less than 1 per cent of what council tax brings in. No finance director would sign off a scheme that builds a whole new bureaucracy to raise so little. 

So, Conservatives will scrap the Family Home Tax and we have set out exactly how we will pay for it. That is what fiscal responsibility looks like. 

John Healey can drop this tax in his Budget in three weeks' time. If he won't, the next Conservative government will.

ENDS

Notes for Editors:

·       The Conservatives have pledged to abolish the Family Homes Tax and repeal the legislation behind it. The first surcharge bills are due to be sent in March 2028, following the Valuation Office's draft list in late 2027 (Ministry of Housing, Communities and Local Government, High Value Council Tax Surcharge: consultation, 19 May 2026, link).

·       High Value Council Tax Surcharge is expected to raise around £400 million a year, though lower property values and sales below the thresholds would reduce receipts from CGT and Stamp Duty. The High Value Council Tax Surcharge which applies in England is expected to raise around £400 million per year once introduced. The OBR's costing of the measure assumes that the tax reduces the value of affected properties as well as leading to some properties being sold at lower prices than their potential value in order to stay below the thresholds (HM Treasury, Budget 2025: Policy Costings, November 2025, link).

·       The abolishment of the Family Homes Tax would be funded by the £900m a year saved by cracking down on unpaid student loans from foreign nationals. The forgone revenue would be fully funded through our overall package of fiscal savings. The £900m per year savings from cracking down on unpaid student loans to foreign nationals cover the cost of this policy plus the same amount in deficit reduction, in line with the Golden Economic Rule.

·       The Conservatives have already pledged to abolish stamp duty on your home. At last year's Party Conference, the Conservatives committed to abolishing stamp duty on primary residences.

Labour's plan to tax the family homes:

·       Labour's Family Homes Tax will be on properties in England worth £2 million with a charge of £2,500 to £7,500 a year, rising with inflation every year. Owners of residential property in England worth £2 million or more in 2026 will pay the surcharge from April 2028 and will continue to pay their existing council tax alongside it, with homes revalued every five years. Homes valued at £2 million to £2.5 million will pay £2,500, £2.5 million to £3.5 million £3,500, £3.5 million to £5 million £5,000, and over £5 million £7,500. Charges will be uprated by CPI each year and the first revaluation will take place in 2033 (Ministry of Housing, Communities and Local Government, High Value Council Tax Surcharge: consultation, 19 May 2026, link).

·       Even the lowest band costs more than the average family's entire council tax bill. The average Band D council tax set by local authorities in England for 2026-27 is £2,392 (Ministry of Housing, Communities and Local Government, Council Tax levels set by local authorities in England 2026 to 2027, 25 March 2026, link).

·       Labour's consultation admits more than nine in ten homes caught are lived in by their owners. The consultation states that the Market Value Survey found over 90 per cent of properties worth £2 million or more in 2024 were owner occupied (Ministry of Housing, Communities and Local Government, High Value Council Tax Surcharge: consultation, 19 May 2026, link).

·       Labour's costing assumes the full cost of the tax is knocked off the value of every home it hits. The OBR assumes 100 per cent pass-through of the surcharge into the prices of liable properties, calculated as the net present value of the annual charge at a 5 per cent discount rate and assuming the charge continues indefinitely, reaching full pass-through from 2028-29 (OBR, Supplementary forecast information release: Costing of high value council tax surcharge, 2 April 2026, link).

·       The tax raises less than 1 per cent of what council tax brings in. Labour forecasts the surcharge will raise around £430 million a year from 2028-29. The council tax requirement in England in 2026-27 is £46.8 billion (HM Treasury, High Value Council Tax Surcharge, 26 November 2025, link; Ministry of Housing, Communities and Local Government, Council Tax levels set by local authorities in England 2026 to 2027, 25 March 2026, link).

·       Labour is building a valuation system separate from council tax. The Valuation Office, part of HMRC, will carry out a targeted valuation exercise using automated valuation models and professional valuers, and will publish a draft list of properties in scope in late 2027. Current council tax bands will not influence whether a property is liable (Ministry of Housing, Communities and Local Government, High Value Council Tax Surcharge: consultation, 19 May 2026, link; OBR, Supplementary forecast information release: Costing of high value council tax surcharge, 2 April 2026, link).