BUDGET 2025: High value council tax surcharge
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From April 2028, the Government will introduce a new annual council tax surcharge on properties valued over £2 million, a leaked budget announcement document has revealed.
There will be four price bands with the surcharge with the lowest at £2m-£2.5m – £2,500 rising up to £7,500 for homes valued at £5m or more.
This measure is estimated to raise £0.4 billion in 2029-30. The revenues will flow to central government rather than remain with local government, as is the case for standard council tax.
The Chancellor is expected to officially announce the change in today’s Budget announcement at 12:30 pm.
Our view
This policy, in our view, appears fair on the surface but might not go far enough.
Property value doesn’t necessarily equate to income and may create a system where those looking to avoid the surchage simply downsize.
This increases demand for lower-value homes which are already in scarec supply as many first-time buyers try to get on the market.
More needs to be done to make the council tax system more equitable for all homeowners and avoids further pressure on an alreadu-fragile property market.
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