Council tax shake-up as Rachel Reeves plan seeks to raise £430m extra | Personal Finance | Finance
The government said it is making the move because council tax has not been readjusted as property values increase. It said this meant some people were having to pay far more for a smaller home than others living in much bigger properties. Now it has launched a consultation on the details of the new High Value Council Tax Surcharge, which is says will make the system fairer for everyone.
In the eight-week consultation views will be sought on a range of issues. These will include the scope of the tax surcharge, the billing process, how the system will be run and the way households can appeal.
The government proposals, announced in Rachel Reeves Autumn budget last year, those with the 1% most valuable properties will “pay their fair share”. It says money raised by the surcharge will help to “fund vital local government services and implementing a significant reform to improve fairness within England’s property tax system”.
It added: “Council tax has remained untouched for decades and has not been readjusted as property values increase. That means that under this flawed system, a multimillion pound mansion could be paying less council tax than a small family home.
“Today the government is setting out the details for the new charge on owners of residential property in England worth £2 million and above to address this unfairness. The consultation also outlines how properties will be identified, valued and placed in a band for the surcharge.”
Dan Tomlinson, Exchequer Secretary to the Treasury, said: “A £10 million mansion in Mayfair should not be paying less council tax than an ordinary family home in Darlington or Blackpool. This change tackles historic unfairness, so that those with the most valuable properties pay their fair share, helping to rebalance the system and putting money back into communities up and down the country.”
The government has also said properties worth more than £2 million will be revalued every five years, with the next revaluation being held in 2033, ensuring that the tax remains fair and up to date with house prices. The consultation also sets out proposals for taxpayers to review the valuation of their property.
The charge, which will affect less than 1% of properties, will come in from April 2028 and is expected to raise around £430 million per year to support funding for local government services.
