UK Chancellor Rachel Reeves Eyes New Council-Tax Bands for High-Value Homes
Plans under consideration aim to introduce higher bands to raise billions from owners of expensive properties ahead of the Autumn Budget
Chancellor Rachel Reeves is reported to be exploring a significant expansion of council-tax bands targeting owners of expensive homes as part of her preparations for the 2025 Autumn Budget.
The proposal under review would create new higher bands for the wealthiest properties, positioning it as a key lever to generate several billion pounds in additional revenue for the public finances.
According to sources familiar with the Treasury’s deliberations, the reform could deliver a multi-billion-pound boost without raising income tax, national insurance or value-added tax on working households.
The idea, described as the “least worst option” for raising funds, reflects the Chancellor’s focus on wealth rather than earnings as she seeks to address the fiscal gap facing the United Kingdom’s public finances.
The current council-tax system remains anchored on 1991 property valuations and top band thresholds that fail to reflect modern home prices, especially in high-value regions.
Analysts estimate that new higher bands could bring in as much as £4 billion annually if implemented.
Some reports suggest reform could be paired with a surcharge on homes above specific thresholds, potentially in the £2 million-plus range.
While no official decision has been taken, the Treasury emphasises that policy details will be announced in the Budget.
The administration reiterates its commitment to maintaining tax stability for working households, indicating any changes will be directed at property wealth.
The reform is viewed as part of a broader strategy to modernise the tax base and improve fairness in property taxation, particularly given the disproportionate rise in housing wealth over the past decades.
Many investors, landlords and owners of high-value residential properties are watching closely, as the changes could affect not only annual bills but also decisions around downsizing, relocation and housing market mobility.
With the Autumn Budget set for later this year, the proposed council-tax overhaul is rapidly emerging as a central fiscal measure in the Chancellor’s toolkit.
The proposal under review would create new higher bands for the wealthiest properties, positioning it as a key lever to generate several billion pounds in additional revenue for the public finances.
According to sources familiar with the Treasury’s deliberations, the reform could deliver a multi-billion-pound boost without raising income tax, national insurance or value-added tax on working households.
The idea, described as the “least worst option” for raising funds, reflects the Chancellor’s focus on wealth rather than earnings as she seeks to address the fiscal gap facing the United Kingdom’s public finances.
The current council-tax system remains anchored on 1991 property valuations and top band thresholds that fail to reflect modern home prices, especially in high-value regions.
Analysts estimate that new higher bands could bring in as much as £4 billion annually if implemented.
Some reports suggest reform could be paired with a surcharge on homes above specific thresholds, potentially in the £2 million-plus range.
While no official decision has been taken, the Treasury emphasises that policy details will be announced in the Budget.
The administration reiterates its commitment to maintaining tax stability for working households, indicating any changes will be directed at property wealth.
The reform is viewed as part of a broader strategy to modernise the tax base and improve fairness in property taxation, particularly given the disproportionate rise in housing wealth over the past decades.
Many investors, landlords and owners of high-value residential properties are watching closely, as the changes could affect not only annual bills but also decisions around downsizing, relocation and housing market mobility.
With the Autumn Budget set for later this year, the proposed council-tax overhaul is rapidly emerging as a central fiscal measure in the Chancellor’s toolkit.
