Council tax revaluations ruled out by new Housing Secretary
Steve Reed removes one property tax threat from the table but with the Budget looming, concerns grow over what the Chancellor will target instead.
Labour will not revalue council tax bands during this Parliament, Housing Secretary Steve Reed (pictured) has confirmed, offering a modicum of relief after months of damaging property tax speculation.
Speaking at the Labour Party conference in Liverpool, he made it clear that council tax revaluation “is not on our agenda” and confirmed the issue has not even been discussed with Chancellor Rachel Reeves, saying: “We’ve got enough on our hands”
Council tax bands are based on property valuations from 1991, which means areas with lower house price growth have disproportionately expensive bills.
Highly regressive
A cross-party housing committee said in July that councils should be given more control over the system, including the right to revalue properties, describing it as “highly regressive”.
Updating these values would likely have resulted in bigger bills for the owners of more expensive homes, and it has made buyers nervous.
According to a report in the Telegraph, Reeves has, though, given the green light to further council tax rises in her Spending Review, meaning town halls will be able to raise the levy by the maximum five per cent.
Nine out of 10 local authorities raised council tax by five per cent in April, taking the average bill to £2,280, but another 5% rise will be nowhere near enough to fill Reeves’s £30bn budget hole.
Buyer confidence rattled
It means that, however welcome Reeds’ comments might be, most homeowners are still bracing themselves for a property tax hit in the Autumn Budget, and the prospect has rattled buyer confidence and caused sales to fall through.
The speculation over where those taxes might fall will now move on. Reeves is reportedly considering Capital Gains Tax on primary residences worth £1.5m. There are also proposals being floated about replacing Stamp Duty with a seller’s tax on properties above £500,000, though the Government has denied it is considering this.
The damage caused by the speculation is only likely to end when Reeves makes her budget announcements on November 26th.
