Recent discussions regarding changes to council tax in England have raised concerns about potential increases in bills for certain households. Following a decision from Rachel Reeves to forgo a proposed income tax hike in the upcoming budget, alternative tax measures are being considered to address public finance issues. One significant proposal involves implementing a form of “mansion tax,” aimed at increasing financial contributions from owners of high-value homes.
Several scenarios are under review, including the possibility of doubling council tax for properties classified in the top two bands (G and H). Another option involves reassessing the values of homes in the highest bands (F, G, and H) and applying a surcharge to the 300,000 most expensive properties. These changes could lead to considerable increases in annual council tax bills for affected households, drawing criticism from those likely to bear the brunt of the increases.
As council tax is a devolved matter, these proposals specifically impact England, though changes could influence similar policies in Scotland, Wales, and Northern Ireland. The system relies heavily on property valuations from 1991, which have not kept pace with rising property values over time. Critics argue that this results in an unfair burden on certain areas, such as the north-east, where council tax rates can be disproportionately high compared to more affluent regions.
Estimated financial impacts suggest that doubling the council tax on the highest-value homes could generate approximately £4.2 billion by 2029-2030. However, concerns have been raised about the implications for households earning just above average incomes, who may face significant tax increases despite not being classified as wealthy.
The proposed mansion tax would require revaluation of 2.4 million properties, affecting a large percentage of high-value homes in London. This potential shift in taxation could lead to notable disparities in tax burden, particularly between areas with significantly different property values. The broader implications of these proposals underscore ongoing debates about equity and fairness within the property tax system in England.
Source: https://www.theguardian.com/money/2025/nov/20/how-could-council-tax-change-in-budget-and-who-would-be-hardest-hit