Merge pull request #1568 from PolicyEngine/codex/fix-1392

Add the high value council tax surcharge

Author: MaxGhenis

changelog.d/high-value-council-tax-surcharge.added.md

@@ -0,0 +1 @@
+Added the England-only High Value Council Tax Surcharge from April 2028, including its 2026-price valuation bands and CPI uprating from 2029-30 onward.

policyengine_uk/parameters/gov/hmrc/council_tax/high_value_surcharge/amount.yaml

@@ -0,0 +1,35 @@
+description: High Value Council Tax Surcharge on owners of residential property in England worth £2 million or more in 2026 prices.
+
+brackets:
+  - threshold:
+      2028-01-01: 0
+    amount:
+      2028-01-01: 0
+  - threshold:
+      2028-01-01: 2_000_000
+    amount:
+      2028-01-01: 2_500
+  - threshold:
+      2028-01-01: 2_500_000
+    amount:
+      2028-01-01: 3_500
+  - threshold:
+      2028-01-01: 3_500_000
+    amount:
+      2028-01-01: 5_000
+  - threshold:
+      2028-01-01: 5_000_000
+    amount:
+      2028-01-01: 7_500
+
+metadata:
+  type: single_amount
+  threshold_unit: currency-GBP
+  amount_unit: currency-GBP
+  uprating: gov.benefit_uprating_cpi
+  label: High Value Council Tax Surcharge
+  reference:
+    - title: High Value Council Tax Surcharge
+      href: https://www.gov.uk/government/publications/high-value-council-tax-surcharge/high-value-council-tax-surcharge
+    - title: Budget 2025
+      href: https://www.gov.uk/government/publications/budget-2025-document/budget-2025-html

policyengine_uk/tests/test_high_value_council_tax_surcharge.py

@@ -0,0 +1,70 @@
+import pytest
+
+from policyengine_uk import Simulation
+from policyengine_uk.variables.gov.gov_tax import gov_tax
+from policyengine_uk.variables.gov.hmrc.household_tax import household_tax
+
+
+def _homeowner(main_residence_value: float, region: str = "LONDON") -> dict:
+    return {
+        "people": {
+            "person": {
+                "age": {2026: 45, 2028: 47, 2029: 48},
+                "employment_income": {2028: 0, 2029: 0},
+            }
+        },
+        "benunits": {"benunit": {"members": ["person"]}},
+        "households": {
+            "household": {
+                "members": ["person"],
+                "region": {2028: region, 2029: region},
+                "main_residence_value": {2026: main_residence_value},
+            }
+        },
+    }
+
+
+def test_high_value_council_tax_surcharge_starts_in_2028():
+    sim = Simulation(situation=_homeowner(2_400_000))
+
+    assert sim.calculate("high_value_council_tax_surcharge", 2027)[0] == 0
+    assert sim.calculate("high_value_council_tax_surcharge", 2028)[0] == 2_500
+
+
+def test_high_value_council_tax_surcharge_is_uprated_from_2029():
+    sim = Simulation(situation=_homeowner(2_400_000))
+    current = sim.tax_benefit_system.parameters("2029")
+    previous = sim.tax_benefit_system.parameters("2028")
+    expected_2029 = (
+        2_500
+        * float(current.gov.benefit_uprating_cpi)
+        / float(previous.gov.benefit_uprating_cpi)
+    )
+
+    assert sim.calculate("high_value_council_tax_surcharge", 2029)[0] == pytest.approx(
+        expected_2029
+    )
+
+
+def test_high_value_council_tax_surcharge_flows_into_tax_aggregates():
+    sim = Simulation(situation=_homeowner(2_400_000))
+
+    other_household_taxes = sum(
+        sim.calculate(variable, 2028)[0]
+        for variable in household_tax.adds
+        if variable != "high_value_council_tax_surcharge"
+    )
+    other_government_taxes = sum(
+        sim.calculate(variable, 2028)[0]
+        for variable in gov_tax.adds
+        if variable != "high_value_council_tax_surcharge"
+    )
+
+    assert sim.calculate("household_tax", 2028)[0] - other_household_taxes == 2_500
+    assert sim.calculate("gov_tax", 2028)[0] - other_government_taxes == 2_500
+
+
+def test_high_value_council_tax_surcharge_only_applies_in_england():
+    sim = Simulation(situation=_homeowner(6_000_000, region="SCOTLAND"))
+
+    assert sim.calculate("high_value_council_tax_surcharge", 2028)[0] == 0

policyengine_uk/variables/gov/gov_tax.py

@@ -15,6 +15,7 @@ class gov_tax(Variable):
         "corporate_sdlt",
         "business_rates",
         "council_tax",
+        "high_value_council_tax_surcharge",
         "domestic_rates",
         "fuel_duty",
         "tv_licence",

policyengine_uk/variables/gov/hmrc/high_value_council_tax_surcharge.py

@@ -0,0 +1,33 @@
+from policyengine_uk.model_api import *
+
+
+class high_value_council_tax_surcharge(Variable):
+    value_type = float
+    entity = Household
+    label = "High Value Council Tax Surcharge"
+    documentation = (
+        "Additional annual surcharge on owners of residential property in England "
+        "worth at least £2 million in 2026 prices."
+    )
+    definition_period = YEAR
+    unit = GBP
+
+    def formula(household, period, parameters):
+        if period.start.year < 2028:
+            return 0
+
+        country = household("country", period)
+        in_england = country == country.possible_values.ENGLAND
+
+        p = parameters(period)
+        property_value = household("main_residence_value", period)
+        current_index = p.gov.economic_assumptions.indices.obr.per_capita.gdp
+        baseline_index = parameters(
+            "2026"
+        ).gov.economic_assumptions.indices.obr.per_capita.gdp
+        value_2026_prices = property_value / (current_index / baseline_index)
+
+        surcharge = p.gov.hmrc.council_tax.high_value_surcharge.amount.calc(
+            value_2026_prices
+        )
+        return where(in_england, surcharge, 0)

policyengine_uk/variables/gov/hmrc/household_tax.py

@@ -15,6 +15,7 @@ class household_tax(Variable):
         "corporate_sdlt",
         "business_rates",
         "council_tax",
+        "high_value_council_tax_surcharge",
         "domestic_rates",
         "fuel_duty",
         "tv_licence",