Rachel Reeves is said to be considering the implementation of a new council tax surcharge on properties valued above £2 million as part of the upcoming Budget. This initiative, often referred to as a “mansion tax,” is expected to affect over 100,000 high-end homes.

Initially, there were reports that the Chancellor aimed to set the threshold at £1.5 million, impacting around 300,000 households. However, it has been suggested that the threshold was raised to £2 million to prevent undue hardship on families with significant assets but limited liquid funds.

In England, council tax is categorized into bands determined by property values from April 1991. It is speculated that the Chancellor is contemplating a reevaluation of the most expensive band F, G, and H properties, totaling 2.4 million homes, to identify those subject to the surcharge.

According to The Times, individuals may have the option to defer payment of the tax until they sell their property or pass away. The Treasury has refrained from commenting on any Budget-related speculations.

In other news, the government is currently seeking feedback on proposals to transition council tax payments from ten to twelve monthly installments. This change could result in lower monthly payments for the average Band D household, potentially saving them around £38 each month, as per data from the Ministry of Housing, Communities and Local Government.

Moreover, households will retain the choice to continue paying their council tax over ten months if preferred. The consultation also includes suggestions for a more lenient debt collection process for individuals who miss council tax payments.

Residents are advised to inquire with their local council about potential council tax discounts, such as a 25% reduction for single occupants or a 50% discount for households where all members are exempt from paying council tax. Additionally, those receiving benefits or with low incomes should explore Council Tax Support or Reduction schemes offered by their local authorities, which could lead to substantial bill reductions or exemptions.

Lastly, homeowners are encouraged to assess their council tax band for potential challenges. Incorrectly assigned bands could result in significant refunds and reduced future bills, although it is crucial to conduct thorough research as challenging a band that is too low may lead to higher future payments.