• The Chancellor is reportedly planning an annual council tax surcharge on houses valued above £2m
• Almost 600,000 houses in London are within the high three council tax bands – and that’s primarily based on sale values which are greater than 40 years outdated.
• Experts say London and the South East are the areas most vulnerable to a mansion tax
The London houses most in danger from a rumoured “mansion tax” may be revealed.
She is believed to have watered down her preliminary plan to impose the levy – estimated at a mean of £4,500 – on houses value £1.5m extra.
Instead, she is predicted to solely goal these valued in extra of £2m.
The additional quantity could be added to council tax payments – which suggests it might change into an annual surcharge.
Working out which houses would pay the levy would reportedly be executed by revaluing all of the houses within the nation which are at present within the three highest council tax bands – F, G and H.
But analysis by The Standard has established that just about 600,000 houses are already within the three highest council tax bands – putting many residents vulnerable to turning into answerable for the brand new tax.
Exact particulars stay unclear however it’s thought the brand new tax could possibly be imposed from 2028.
However revaluing even simply the houses within the three high council tax bands could be a mammoth job.
Imposing a surcharge on these already classed as band F, G and H properties could be a lot less complicated.
However these bands date from 1992 and fail to take account of the massive modifications within the London property market over the past 4 many years.
For instance, solely 29 houses in Waltham Forest and 50 in Hackney are at present within the highest band – which makes a mockery of the hovering costs in each boroughs, significantly in fascinating areas similar to London Fields and Walthamstow.
The seven London boroughs with the best quantity of Band H houses are: Westminster (16,772), Kensington & Chelsea (15,176), Camden (4,730), Barnet (4,339), Richmond (3,606), Hammersmith and Fulham (2,914) and Wandsworth (3,007).
But Bromley has greater than 30,000 houses in Bands F and G, putting lots of its residents vulnerable to a mansion tax, whereas there are round 20,000 in Croydon and 15,000 in Enfield additionally in these classes.
This is what we all know thus far concerning the proposed mansion tax.
When is the mansion tax as a result of begin?
According to stories, it is probably not launched till 2028. There is the suggestion that residents can defer paying it till they transfer house – or till they die.
What do the specialists suppose?
TV presenter Kirtie Allsopp, of Location, Location, Location fame, mentioned there was a must reform the council tax system.
But she instructed Times Radio: “We all know that council tax is unfair. It would not work. It must be redone. I’ve no objection to re-examining council tax. But I feel the issue about this proposal is it is going to value some huge cash to revalue these properties.”
Jack Fletcher-Price, fairness analyst at Morningstar, mentioned a mansion tax would disproportionally hit London and the South East.
“The modifications to council tax bands might be overdue, however it should additional undermine belief on this Government given they promised not to do that within the run as much as the election,” he mentioned.
When was council tax launched?
Council tax was launched into England, Scotland and Wales in April 1993, changing the neighborhood cost or “ballot tax”.
How many properties are answerable for council tax?
25.1 million dwellings are answerable for council tax in England. Of these, 15.9m are answerable for the total fee whereas 8.8m qualify for a reduction – of which 8.5m obtain the only individual’s low cost.
There have been 268,000 dwellings recorded as second houses for the needs of council tax. Most councils cost double fee council tax for second houses.
How is the council tax labored out?
Councils set a “benchmark” band D fee. Each of the opposite seven bands is then a fraction or a number of of this quantity – from 6/9 for Band A to 18/9 for Band H.
How do houses find yourself in a selected band?
Banding in England and Scotland is predicated on sale values as of April 1991. Wales is barely much less out date and makes use of sale values on 1 April 2003. The Welsh authorities plans an extra revaluation, to take impact from 1 April 2028.
Valuations are carried out by the Valuation Office Agency in England. Councils don’t take part on this course of and can’t compel the revaluation of single or a number of properties.
What’s the issue with council tax and why is it known as a regressive tax?
According to the House of Commons library, even after taking account of council tax advantages, the poorest fifth pay a larger proportion of their gross revenue on council tax than the richest fifth.
Last yr the London mayor Sir Sadiq Khan mentioned: “Council tax is a regressive tax because the poorest Londoners pay round six instances extra in council tax than the very best earners as a proportion of revenue.”
