Council tax on Scotland's most expensive homes could almost double
Council tax on Scotland's most expensive homes could nearly double to approximately £7,700 annually, according to the Scottish government. The proposed 'mansion tax' would see an estimated increase of £3,600 for properties valued over £2 million, while homes worth between £1 million and £2 million could face a rise of about £720.
The government estimates that around 15,000 properties, representing 1% of Scotland's housing stock, would be affected by these new rates. The plans are currently subject to a public consultation and are targeted for implementation from April 2028.
This mansion tax was a significant element of the Scottish government's Budget announcement earlier this year, although parliamentary approval is required before the measures can be enacted.
Income tax changes and mansion tax on £1m homes in Scottish Budget
Current council tax bands and proposed changes
Scotland currently employs eight council tax bands, labeled A through H, with rates that can vary by local authority. The government's proposals include the creation of two new bands: Band I for homes valued between £1 million and £2 million, and Band J for properties valued above £2 million.
The average annual council tax bill for households in the current highest band, Band H, is approximately £4,051, according to government data. Under the proposals, the bill for homes in the new Band I could increase to about £4,800, while properties in Band J could see a rise to around £7,651.
Distribution and concentration of high-value properties
High-value properties in Scotland are not evenly distributed; they are predominantly located in urban centers, especially Edinburgh, as well as some rural areas. Data from Registers of Scotland indicates that in the 2024-25 period, 391 properties sold for more than £1 million, with over half of these transactions occurring in Edinburgh.
The government has stated that revenue generated from the mansion tax would be allocated to local authorities through a process agreed upon with the council umbrella organization, Cosla.
To identify which properties fall into the new tax bands, a "targeted revaluation" will be conducted by the Scottish Assessors on all properties estimated to be worth more than £1 million, regardless of their current band classification. It is important to note that existing council tax bands are based on property valuations from 1991.
Council tax reform
There is broad cross-party agreement on the need to reform the outdated council tax system, although no consensus has been reached on the specific approach. The Scottish government held consultations on potential reforms during the previous parliamentary session, but no definitive plans have been finalized.
The government has indicated that any changes will be developed through "cross-party discussions with local government."
Deputy First Minister Jenny Gilruth commented on the consultation launch:
"Our approach to tax is based on fairness – asking the wealthiest among us to contribute a bit more. 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."
Separately, the UK government has announced plans for a similar "mansion tax" targeting properties in England valued above £2 million.
Council tax revaluation 'absolutely' needed, says minister
