One of Britain’s leading tax experts has raised serious concerns over Rachel Reeves' proposed mansion tax on high-value homes, expected in her upcoming Budget. Dan Neidle, founder of Tax Policy Associates, questioned the plan to target 100,000 of the most expensive properties with an average charge of £4,500, based on out-of-date valuations.
Ms Reeves is reportedly considering revaluing council tax bands F, G and H to fill a £20bn hole in her spending plans, after the Office for Budget Responsibility downgraded growth forecasts until 2029. However, Mr Neidle said the revaluation of top bands “doesn't make sense” because valuations are based on 1991 property values, leading to anomalies.
He explained that areas like Walthamstow, east London, have only 70 properties in the top three bands, while Mid-Buckinghamshire has 15,000, despite homes in the former now being worth more. “It's an easy problem to solve: just revalue council tax bands,” he said, but noted it is politically tricky as half of households would pay more.
Mr Neidle suggested the government might instead consider a 1% tax on properties worth £2m or more, which could raise £2bn. However, he warned this could cause a housing market block if homeowners, including “pretty ordinary people in £3m houses,” cannot afford the tax and opt for deferral.
He concluded that the simplest but unfair outcome would be additional council tax on existing bands, adding: “I won't die of shock if we see that.”
