Rachel Reeves is reportedly contemplating introducing additional higher tiers of council tax aimed at wealthy homeowners with expensive properties. This initiative, expected to be discussed ahead of the upcoming Budget, is seen as a strategy by the Chancellor to address financial deficits attributed to the previous government.
Although final decisions have not been made, Reeves has consistently hinted at the possibility of increased taxes for affluent individuals as part of the Budget agenda set for November 26. Sources close to Reeves revealed that discussions are centered on the implementation of heightened taxation on luxury properties, emphasizing the importance of equitable contributions from all segments of society.
Various options under consideration include a potential tax based on property value and the imposition of capital gains tax on the sale of high-end residences, although these measures are viewed as less likely. Reeves is also anticipated to introduce a “mansion tax” imposing capital gains tax on the sale of the most valuable homes, aligning with her recent statements highlighting the financial impact of Brexit and austerity on public finances.
Council tax payments in England are determined by property bands ranging from A to H, with higher bands typically associated with more valuable properties. The concept of introducing new council tax bands for England’s most luxurious homes was initially explored by former Conservative Chancellor George Osborne in 2012.
Ruth Curtice, from the Resolution Foundation think-tank, expressed support for the idea of an enhanced council tax structure for high-value properties as a means to tax wealth effectively. While acknowledging that this alone may not resolve property tax complexities, Curtice emphasized the importance of wealthier individuals contributing more through increased council tax payments.