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Comment: ‘A council tax rise (done right) might not be a terrible thing’

 (Matt Writtle)
(Matt Writtle)

So a council tax rise next year is “more likely than not” to be announced in tomorrow’s Autumn Budget. It’s one of many expected tax hikes that households will be feeling they can ill afford.

We are already facing a bilious cocktail of rising prices but at least we know the recipe by heart: energy bills, mortgage rates and rent hikes garnished with costs of living au choix.

Now Jeremy Hunt is promising to throw another ingredient into the mix — higher council tax.

You’d be forgiven for needing to vomit.

And yet, of all the tax levers at the Chancellor’s disposal, council tax has the potential to be the fairest one with which to tinker.

The bands have not been revised since 1991, when the highest rate was set for Band H, for homes that then cost £320,000 or more.

Fast forward 30 years and it means someone in a house worth £2 million or so will pay the same council tax as someone in a £50 million mansion.

Both are undeniably huge sums of money but, the housing market being what it is, in London a £2 million home is not on its own a mark of extraordinary riches, as Ed Miliband found out to his cost when he suggested the Mansion Tax in 2014.

Nonetheless those with most should pay most.

If the Government is serious about raising money to pay for social care, as well as level up the country, it could increase revenues from council tax without putting an extra burden on the less well off, by overhauling the bands used to calculate it.

After years of house price inflation, adding a few more bands at the top would help, too.