Plans by the Labour government to impose a mansion tax on properties valued over £2 million have been met with strong criticism from Bath’s cabinet member responsible for council resources. Mark Elliott, representing Lansdown and the Liberal Democrats on Bath and North East Somerset Council, condemned the proposed “high value council tax surcharge” as “completely unfair” and potentially damaging to local interests.
Under the new scheme, owners of homes valued above £2 million could face annual additional charges ranging from £2,500 to £7,500. The surcharge would be collected alongside standard council tax but, unlike existing taxes, all proceeds would be directed to the central government rather than local councils. For some properties in Bath, these extra payments may even exceed current council tax bills.
Elliott, who manages the council’s finance and tax-setting processes, expressed concern about the lack of clarity around the surcharge’s implementation and impact on Bath residents. He remarked, “This looks less like a council tax adjustment and more like a government maneuver to raise central funds while technically adhering to Labour’s prior tax commitments.”
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He further criticized the shift of funds away from local councils, emphasizing the importance of council tax revenue for essential services such as road maintenance, waste collection, and social care — services many vulnerable community members rely on daily. “Local taxpayers rightly expect their money to support local services. Diverting it to plug holes in national budgets is fundamentally unjust,” Elliott added.
Calls to reform council tax have persisted for years, largely due to its outdated basis on 1991 property values and its failure to account for taxpayers’ current ability to pay. Nonetheless, council tax remains crucial for local governments facing significant funding shortfalls. Bath and North East Somerset Council has recently raised council tax by the full 4.99% allowed without triggering a local referendum, primarily to manage escalating social care costs. Currently, a Band H property in Bath pays approximately £4,429 annually in council tax after all levies.
The government estimates fewer than 1% of English homes will be subject to the new surcharge. However, in Bath, where Georgian townhouses often exceed the £2 million mark — such as one on the famed Circus currently valued at £3.9 million — the tax could impact some prominent local homeowners. Importantly, the surcharge targets property owners rather than occupants, marking a departure from how council tax is traditionally assessed.
The government plans to roll out the mansion tax in April 2028 and intends to hold a public consultation on the finer details next year. They will also provide compensation to councils to cover the costs of administering the tax. Meanwhile, local officials like Elliott urge a genuine, comprehensive reform of council tax rather than what they see as a superficial and ineffective patch.