Care homes in England will be fully exempt from new council tax surcharge, Care England says

A full exemption, not the discount some expected

Care homes in England will be fully exempt from the High Value Council Tax Surcharge when it comes into force in April 2028, Care England says the Government has confirmed (opens in a new tab). Some in the sector had expected only a partial discount.

That matters to any operator whose home sits in a building valued at £2 million or more. Under the surcharge, such properties would have faced a yearly charge of between £2,500 and £7,500, according to Care England.

This is a cost stopped before it landed. No new money reaches care.

A tax that could have cost the sector up to £33 million a year

The surcharge was announced in the 2025 Budget. It is a new charge on residential property in England valued at £2 million or more (opens in a new tab), due to start in April 2028.

The Government consulted on its detailed design, including whether care homes and similar accommodation should be covered. The answer, Care England reports, is that care homes are out.

Analysis cited by Care England estimated that bringing care homes into the surcharge could have added £25 million to £33 million a year in extra costs across the sector.

Eight months of lobbying for the full exemption

The decision followed an eight-month campaign. Care England first wrote to the Secretary of State for Housing, Communities and Local Government in February 2026, warning the surcharge would be economically counterproductive for care.

In its consultation response in July 2026 it argued for a full statutory exemption rather than a partial discount. That is what it won.

The one good thing in a thin Budget

Professor Martin Green, chief executive of Care England, welcomed the decision as "sensible". Care homes, he said, are "principally places where people receive essential care and support".

He was blunt about the rest. The Autumn Budget, in his words, "offered little in the way of meaningful support for adult social care", and stopping an unreasonable future cost was the only thing left to celebrate from it.

Green ties the decision to a wider complaint about the gap between council fee rates and the fair cost of care, and the weak finances of smaller providers. The same gap runs through our piece on fees shaping England's care market.

Which homes qualify has not been set out

Care England's announcement does not say which types of care accommodation qualify. It does not say whether nursing homes, extra care or supported living are covered alongside residential homes, or how the exemption will be written into law.

Operators running extra care or supported living in high-value buildings should not assume they are in until the Government's detail is published. Care homes have the clearer answer.

The new tax on care homes will not arrive. The fee gap Green complains of is already here.