The government is being asked to clarity who pays the new Mansion Tax when it applies to rental properties.

Letting agents’ body Propertymark says this is just one of a number of questions unresolved about the tax. 

In an official response to the government’s consultation on the idea, the agents’ trade body says many high-value homes have not been sold for several years, meaning accurate valuations cannot be based solely on online estimates or market appraisals.

The tax is officially known as the High Value Council Tax Surcharge (HVCTS) and would apply to residential properties in England valued at £2m or more from April 2028. 

While the government expects fewer than 1% of homes to be affected, Propertymark believes important practical issues surrounding valuation, enforcement and liability must be addressed before the scheme can be introduced.

The body’s primary concern is over valuation.

In particular, Propertymark warns there are unlikely to be enough qualified valuers to assess the estimated 165,000 affected properties before the surcharge is due to take effect. It also doubts that councils have the funds or resources to administer the scheme. 

The body raises other queries, including whether the resident or owner should be responsible for paying the surcharge where a property is rented. 

Propertymark recommends allowing landlords to decide whether they or their tenants are liable, reflecting the flexibility which already exists for council tax arrangements. 

The body says: “Alongside our concerns about implementation, Propertymark supports deferral arrangements for eligible homeowners but believes the proposed income and savings thresholds should be reviewed to protect lower-income households living in high-value homes.

“Exemptions and discounts for a range of specialist property types, including purpose-built student accommodation, care homes and refuges for people fleeing domestic abuse, are also areas Propertymark supports.”

But it rejects the government’s suggestion of an additional surcharge for non-UK resident owners, warning that doing so could discourage international investment in the UK’s high-value housing market.

The consultation summary concludes: “Propertymark believes the Government must resolve fundamental questions around valuation, liability, enforcement and resourcing before introducing HVTS. A clear, practical framework will be essential to ensure the policy is fair, proportionate and capable of effective implementation.”