Rachel Reeves is reportedly contemplating the introduction of new higher council tax bands aimed at affluent homeowners. The Chancellor is purportedly looking into targeting wealthier property owners to address financial deficits resulting from previous government policies.
While specific decisions have yet to be made, Reeves has consistently hinted at the possibility of increased taxes on the affluent as part of the upcoming Budget on November 26. Discussions are ongoing on the implementation of higher taxation on luxury properties.
In addition to potential council tax adjustments, there are considerations for a levy on property values or the imposition of capital gains tax on the sale of expensive homes. However, these alternatives are viewed as less probable.
Reeves is anticipated to unveil a “mansion tax” that would apply capital gains tax to the sale of the most costly residences. The current council tax system in England, which is based on property bands ranging from A to H, determines the amount homeowners pay to local authorities.
The notion of introducing new council tax bands for the most expensive properties was initially explored by former Conservative Chancellor George Osborne in 2012. Ruth Curtice from the Resolution Foundation think-tank suggested the potential for an enhanced council tax structure for high-value properties to address wealth taxation issues.
The proposed changes aim to ensure fairness in tax contributions, particularly from the affluent segment of society.