Rachel Reeves is said to be considering the introduction of a new council tax surcharge on properties valued at over £2 million as part of the upcoming Budget. This proposed “mansion tax” is expected to impact more than 100,000 of the highest-value homes.
Initially, there were reports that the Chancellor was aiming for a £1.5 million threshold, which would have affected around 300,000 households. However, it is now rumored that the threshold has been raised to £2 million to avoid putting financial strain on families deemed “asset-rich, cash poor.”
In England, council tax is categorized into bands determined by property values from April 1991. The Chancellor is allegedly planning to reassess approximately 2.4 million homes in the higher bands F, G, and H to identify those subject to the surcharge.
According to reports from The Times, individuals may have the option to defer payment of the tax until they sell their property or pass away. The Treasury has not provided any official comments on the Budget speculations.
In other news, the government is currently seeking feedback on proposals to extend council tax payment periods from ten to twelve months. This change aims to offer more flexibility in managing payments for households. Additionally, households will still have the choice to adhere to the ten-month payment plan if preferred.
Residents are encouraged to inquire with their local council about potential council tax discounts that they may be eligible for, such as discounts for single occupants or those exempt from paying council tax. Individuals receiving benefits or with low incomes should explore whether their local authority provides Council Tax Support or Reduction schemes, which could entitle them to significant reductions or exemptions from their council tax bills.
Moreover, homeowners are advised to investigate the possibility of challenging their council tax banding if they believe it is too high, as this could result in refunds and reduced future bills. However, it is crucial to conduct thorough research beforehand, as a lower council tax band could lead to increased future payments.
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