High-value property tax would increase costs for councils, warns LGA
The Government’s High Value Council Tax Surcharge would apply to homes worth more than £2m, but councils would be expected to bill, collect and enforce the surcharge.
The Local Government Association (LGA) has warned that using councils to run a national tax for high-value properties would cause extra costs, confusion for residents and damage to local accountability.
The Government’s High Value Council Tax Surcharge would apply to homes worth more than £2m, but councils would be expected to bill, collect and enforce the surcharge.
They would also have to find liable owners, manage deferrals, process appeals and collect debts, including from owners based overseas.
The income collected would go directly to the Government, not councils.
The LGA said this would create a complex and expensive parallel system, with extra staffing, legal and technology costs.
The association added that there is a risk councils would lose out financially if the Government did not cover all costs.
The Government said the revenue would support council services, but has not made it clear if this funding would be additional or if cuts would be made elsewhere.
The LGA said calling the charge “council tax” would confuse residents, who might hold councillors accountable for a tax they did not set.
Additionally, the LGA said tracking non-resident and overseas owners would be costly and legally unclear.
The LGA has called for the Government to run the surcharge nationally, rather than using councils.
Councillor Kam Rai, Chair of the Resources Committee at LGA, said: “The surcharge is a national tax, yet councils would be left to administer it, carry the risk, and deal with the confusion it will create for residents.
“Without full funding for implementation costs and clear accountability, this proposal risks adding cost and complexity at a time when councils are already under enormous pressure.
“We need a cast-iron guarantee from government that any money raised must be genuinely additional and must not be used to offset reductions elsewhere.“
Rai added: “Councils should not be expected to run a new national tax system that could leave them out of pocket and undermine local democratic accountability.”
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