The findings of a recent report conducted by the Joseph Rowntree Trust has suggested that a higher rate of council tax should be paid by occupants of houses worth over £1m. According to the report the income derived from the extra taxation would mean that the poorest tenth of the population would have their bills reduced by more than 10%. The report states that Council tax is in need of urgent reform as it has not been assessed since 1991. The tax was put in place to tax a higher proportion of cheaper properties compared to expensive homes which is why it deemed to be so unfair. The government provides loans in the forms of grants to freeze increases in the tax but this is becoming increasing expensive to do.
The Conservatives have so far resisted the mansion tax which is being sought by the Liberal Democrats but it looks like this demand will not go away particularly as house prices are continuing and it doesn’t seem fair that a mansion valued at £5m should be paying the same tax as a family in a 3 bedroomed home. For more information on the report please go to the Joseph Rowntree report here.