Wednesday’s budget also expected include new money to hire planners
The chancellor is reportedly planning to increase tax on the most expensive properties and invest millions to recruit hundreds of new planners.
According to reports in The Times ahead of the Budget on Wednesday, Rachel Reeves is expected to apply a surcharge worth an average £4,500 on around 150,000 households with homes worth more than £2m.
The levy will be realised by revaluing homes in council tax bands F, G and H. Around 2.4 million homes are expected to be revalued in this fashion, with the tax expected to raise between £400m and £450m.
The newspaper said that the tax was initially intended to apply to 300,000 households in properties valued higher than £1.5m, but that there were concerns about hitting cash-poor and asset-rich households, particularly in the capital.
The budget is also expected to include an investment of £48m to recruit 350 new planners.
Tom Bill, head of UK residential research, at Knight Frank, said the revaluation proposals “could prove costly and disruptive” and that “backbench politics” was driving the Budget.
He said changed to council taxes came with major challenges, including the logistical hurdle of valuing such a large number of homes.
“A valuation that does not go into sufficient detail can be legally challenged, which immediately raises the question of government resources,” said Bill.
“Properties near price thresholds create the biggest headache and challenges can cost the government time and, more importantly, money.
“Higher-value homes are particularly complex to value because there is less uniformity between properties.”
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