The Labour government’s proposal to impose a mansion tax on homes valued over £2 million has been met with strong criticism from Bath’s cabinet member for resources, Mark Elliott. Describing the scheme as “completely unfair,” Elliott warned of its potential negative impact on residents and local councils.
Under the planned “high value council tax surcharge,” owners of properties worth more than £2 million could face an additional annual charge ranging from £2,500 to £7,500. This surcharge would be collected alongside council tax but redirected entirely to the central government rather than local council revenues. For some Bath properties, particularly Georgian townhouses in the city centre, this new charge could exceed their current council tax bills.
Speaking to the Local Democracy Reporting Service, Elliott emphasized the uncertainty surrounding the scheme’s details, which councils are still awaiting. He argued that the tax appears less like a reform of council tax and more like an effort to increase central government revenue while technically adhering to Labour’s election promises.
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“This surcharge targets owners of homes valued over £2 million, diverting funds away from local councils that depend on council tax to fund critical services like highways, bin collections, and social care,” Elliott explained. “Local taxpayers rightly expect their payments to support essential services in their communities, not to plug holes in national government budgets.”
Calls for council tax reform have long been voiced across the country, with many pointing out the outdated 1991 property valuations used to calculate the tax and its disconnect from individual ability to pay. Despite this, local councils remain heavily reliant on council tax, especially amid ongoing cuts to government funding and rising social care costs.
Bath and North East Somerset Council has raised its council tax by the maximum increase allowed without a referendum, 4.99%, to meet its growing financial demands. Currently, a band H property in Bath pays £4,429.08 annually in council tax.
The government estimates that less than 1% of homes in England will be subject to this new mansion tax. Some prestigious properties in Bath, like a £3.9 million home on the Circus, could be affected. Unlike traditional council tax, the surcharge will be the responsibility of property owners rather than residents.
The government also plans to reimburse local authorities for the costs associated with collecting the surcharge. Implementation is targeted for April 2028, with a public consultation on the scheme scheduled for next year.