Rachel Reeves is said to be preparing to introduce a new levy on properties valued above £2 million as part of the upcoming Budget. Dubbed the “mansion tax,” this surcharge is expected to affect over 100,000 high-end homes.
Initially, there were reports that the Chancellor aimed for a £1.5 million threshold, impacting 300,000 households. However, the threshold has been raised to £2 million to prevent placing undue burden on “asset-rich, cash poor” families.
In England, council tax is categorized into bands determined by property values in April 1991. The Chancellor is reportedly considering revaluing the most expensive Band F, G, and H homes, affecting around 2.4 million properties.
The Times suggests that individuals may defer payment of the tax until they sell their homes or pass away. The Treasury has not yet commented on any Budget-related speculations.
Council tax bands in England are set based on property values from 1991. The average Band D council tax for the 2025-2026 financial year in England is £2,280, with Scotland and Wales having different band structures.
Currently, the government is seeking feedback on proposals to extend council tax payment periods from ten to twelve months. This change would offer smaller monthly payments by default, potentially saving the average Band D household around £38 per month, according to data from the Ministry of Housing, Communities, and Local Government.
Households will retain the option to pay their council tax over ten months if preferred. Additionally, the consultation includes suggestions to slow down debt collection procedures for missed payments.
Residents are advised to check with their local council for potential council tax discounts, such as 25% off for single occupants or 50% off for households where all members are exempt. Those receiving benefits or with low incomes should explore Council Tax Support or Reduction schemes for possible bill reductions or exemptions.
Lastly, homeowners are encouraged to review their council tax banding for potential adjustments that could lead to refunds and lower future bills. It is essential to research thoroughly as incorrect banding could result in higher future payments.