The UK Autumn Budget 2025 introduced a new High Value Council Tax Surcharge for England -an annual levy of £2,500 to £7,500 on properties valued above £2 million, based on updated 2026 valuations.
Although council tax is devolved and this surcharge does not apply automatically in Scotland, it sets a clear direction for higher taxation of premium homes across the UK. The Scottish Government has since announced it will introduce new upper‑tier council tax bands from April 2028, mirroring the UK shift but opting for band‑based increases rather than a fixed‑value mansion tax, with thresholds and rates still under consultation and expected to be lower than those in England.
What the Scottish Government has announced
It is proposed that Scotland will have new council tax bands above the current Band H from 1 April 2028, targeting higher‑value homes. The bands will apply to properties 1. Between £1m and £2m – and 2. Those valued over £2m. This is in comparison to the proposed bands in England where there are currently 4 proposed band starting at properties valued at £2m to those valued above £5m. The Scottish Government emphasised the need to update a system still anchored to 1991 valuations, which have diverged dramatically from property prices today.
Exact valuation thresholds and multipliers for the new bands are not yet published and may depend on further consultation and whether a national revaluation is undertaken. A phased or capped introduction is likely, reflecting the Scottish Government’s stated aim of avoiding steep year‑one increases.
Why this matters for US owners of Scottish property
Many US‑based owners hold Scottish residential property for relocation, education, retirement planning or global portfolio diversification. The upcoming changes will raise annual holding costs over time and may influence renovation decisions, long‑term estate planning, and the timing of future acquisitions or disposals.
The direction is similar to that of the rest of the UK: premium homes will carry higher annual charges, especially in areas where property prices have surged, such as Edinburgh, East Renfrewshire and East Lothian.
Key takeaways for US‑based owners and investors
For high‑value homeowners, higher annual property‑related costs are likely ahead, with the greatest impact expected in fast‑growing markets where values have surged most dramatically. With further details still to come, owners would be wise to keep a close eye on developments as the reforms progress.
What’s next?
The Scottish Government is continuing its consultation on wider council tax reform and will release additional information ahead of the 2028 implementation date.
If you think you may be affected by these new high‑value council tax bands—whether as a current property owner or as someone considering purchasing in Scotland—now is a good time to explore estate‑planning opportunities, long‑term structuring options, and timing considerations surrounding future acquisitions or disposals.
If you would like to discuss how these developments might interact with your broader estate plans, please get in touch with one of our wills and estate planning lawyers.
Contributors
Partner
Solicitor
