Fury as Rachel Reeves to impose £2,500 extra council tax | Politics | News
Rachel Reeves accused of introducing ‘aspiration tax’ (Image: Getty)
Rachel Reeves has been accused of imposing a “tax on hard work” after planning to increase council tax on expensive homes by £2,500. Treasury consultation found that properties could be liable for higher charges if the extension was added.
The government expects to collect an extra £635 million from homeowners each year after introducing a “high value council tax surcharge” to be paid on top of existing council taxes. 165,000 properties initially valued at £2 million or more will be affected. The government says this means only one in 100 homes is responsible, but the Conservatives predict more properties will be included in the future.
The additional payment is £2,500 for homes valued up to £2.5 million, rising to a maximum of £7,500 for the highest value properties.
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Homes worth more than £2 million will be revalued every five years, but if a property is renovated or extended the new value will take effect as soon as it is sold.
Shadow local government minister Gareth Bacon said: “Labour’s new family homes tax is a tax on desire, working hard, saving lots and investing in your family’s future.
“Labour politicians, encouraged by the Greens and Liberal Democrats, will undoubtedly drag more families into the net. And none of the money will fund local services, with every penny going straight to Whitehall bureaucrats.”
“Meanwhile, council tax is rising across the board under Labor, with the average family living in a Band D home facing a cumulative rise of £1,134 across this Parliament. Only the Conservatives can be relied upon to keep tax on the family home low.”
Treasury plans include allowing homeowners to apply to defer payments until they sell their property or die; This clearly recognizes that the costs will affect some people whose homes are rising in value quickly but who do not have high incomes.
Ministers insisted the changes would end the current unfair system where luxury mansions pay the same council tax as large family homes.
Treasurer Dan Tomlinson said: “A £10 million mansion in Mayfair should pay no less council tax than an ordinary family home in Darlington or Blackpool.
“This change tackles historic injustice so those with the most valuable properties pay their fair share, helping to rebalance the system and funneling money back into communities across the country.”
But Sarah Coles, head of personal finance at personal investment providers AJ Bell, said: “Luxury properties will become piggy banks when the ‘mansion tax’ comes into effect.”
