York council leader on Government plans for new home tax

The council’s Labour Leader Cllr Claire Douglas said local authorities should be given the resources to properly administer the tax which should also be clear and straight-forward for residents.

Cllr Kam Rai, of the Local Government Association (LGA), said councils risked being left to deal with the risk of the High Value Council Tax Surcharge and confusion it could case.

A Government spokesperson said the tax could raise £430 million to fund public services while also addressing long-standing unfairness between different parts of the country.

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It comes as the Government is currently consulting on the details of the surcharge ahead of further plans being unveiled in the next Spending Review.

The proposal, which would see owners of homes worth £2 million or more pay an additional charge on top of their council tax bills, was unveiled in November.

Charges would be based on the amount homes were worth in April 2026 and would be levied from April 2028 if they are adopted.

Homes would be placed into four bands based on their property value and would increase in line with inflation from 2029 onwards.

It would be collected by councils, with revenue going to the Government though it is intended it would be used to fund local services.

The Government’s consultation on the plans includes details such as relief and exemptions and how arrangements such as commercial ones would be dealt with.

Councils are set to be compensated for the extra costs of collecting the tax, according to the Government.

Government officials have said the tax would help address unfairness with the current council tax system.

The average Band D charge for a typical family home is £2,280-a-year, £250 more than that charged for a property worth £10 million in Band H in Mayfair, in the City of Westminster.

But the LGA said councils would have to identify owners, administer deferrals, manage appeals and pursue debt recovery including from overseas owners, despite not keeping the money raised.

Cllr Douglas said local authorities should be given the funding and support needed to run the new system.

She said: “Local authorities should not be left out of pocket for delivering a national scheme.

“It’s also important that where decisions about the surcharge are made nationally, that should be be clearly communicated so people understand what the charge is and who is responsible for it.

“We look forward to continuing to work with Government and the LGA to ensure any new arrangements are practical, properly funded and support councils like York to continue delivering high-quality local services.”

LGA resources committee chair Cllr Rai said the proposals risked adding costs and complexity at a time when councils are under enormous pressure.

The committee chair said: “We need a cast-iron guarantee that any money raised must be genuinely additional and must not be used to offset reductions elsewhere.

“Councils should not be expected to run a new national tax system that could leave them out of pocket and undermine local democratic accountability.”

The Government’s spokesperson said: “This tax is expected to raise around £430 million -a-year to help fund public services and is addressing a long-standing unfairness in our country, where a Band D home in Darlington or Blackpool pays more in council tax than a £10 million mansion in Mayfair.”