HM Revenue & Customs is preparing to send valuation officials into homes across England as the Government builds an enforcement operation for its new high-value property tax, raising fresh concerns over the extent to which the state will intrude into private homes to raise revenue.
HMRC valuation agents will assess properties to determine whether they cross the £2m threshold for the surcharge, with homeowners who refuse access potentially facing criminal prosecution and fines.
The officials have already been dubbed the “council tax police” by critics.
Homeowners who deny inspectors entry could face a fine of up to £200. Those who fail to provide requested information without a “reasonable excuse” could face penalties of as much as £500.
The levy, formally known as the high-value council tax surcharge, was announced by former chancellor Rachel Reeves in last year’s Budget. Properties worth more than £2m could face an additional annual charge of up to £7,500, depending on their value.
London and the South East are expected to account for much of the liability, although expensive properties in rural areas will also be caught by the new regime.
The enforcement plans have turned what began as a tax on high-value property into a wider political argument over the boundaries of state intervention in private homes.
Sir Mel Stride, the shadow chancellor, described the measures as a “sinister assault on civil liberties”.
“We may have changed Prime Minister, but it’s the same old story with Labour – how can we raise taxes to pay for more benefits? Now they have chosen a sinister assault on civil liberties as their latest method,” he said.
“Andy Burnham and Angela Rayner are sending their council tax police to people’s homes so they can drag them into paying their new family homes tax.
“This is a tax on aspiration, on working hard and investing well, and Labour will stop at nothing to make as many people as possible liable for it.”
Sir James Cleverly, the shadow housing secretary, described the inspections as “snooping”.
“Hard-working families and pensioners face the prospect of HMRC tax inspectors snooping around their gardens and inside their homes, to justify hiking taxes on them,” he said.
“Even homes which are below the new tax thresholds face these intrusive checks, with the threat of criminal prosecutions and fines if people refuse.”
The Valuation Office will initially use third-party data and publicly available information to identify properties that could fall within the surcharge.
Satellite technology will also be used to assess properties, while ministers have confirmed that internal inspections will form part of the valuation process.
Inspectors are expected to record detailed information about properties, including their size, architectural style, number of floors, rooms, bedrooms and bathrooms.
Jonathan Russell, chief executive of the Valuation Office, told MPs earlier this year that properties previously valued above £1.5m would be reassessed to determine whether they had crossed the £2m threshold.
He said the agency wanted to “make sure we’re not missing anything”.
The prospect of physical inspections has alarmed property experts, who have told ministers that keeping valuations accurate could require “regular” visits by qualified surveyors carrying out full physical surveys.
The Government argues that the exercise is necessary to correct what it describes as a longstanding distortion in the council tax system.
A Government spokesman said: “The public understands that we are addressing a longstanding unfairness, where a Band D home in Darlington pays more in council tax than a £10m mansion in Mayfair.”
“The Valuation Office has extensive experience valuing domestic property, and will use a wide range of evidence to determine bandings.”
The spokesman said any visits would take place by prior agreement with homeowners and in accordance with the Government’s code of practice.
Dan Tomlinson, a junior Treasury minister, confirmed that the Valuation Office would contact homeowners to “arrange a visit”.
The policy nevertheless creates a new administrative relationship between the tax authority and private property owners, with the Government relying on increasingly detailed information about homes to determine who is liable for a substantial new annual charge.
For ministers, the justification is equity: a property worth several million pounds can currently sit within a council tax system whose structure was never designed to reflect today’s property values.
For opponents, the issue is not simply the size of the tax bill but the machinery being constructed to collect it.
The mansion tax debate is therefore moving beyond whether wealthy homeowners should pay more. It is becoming a test of how far the Government is prepared to go inside people’s homes to identify the revenue it believes it is owed.
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