Rachel Reeves is reportedly contemplating introducing new higher tiers of council tax to target owners of luxurious residences.

As the Budget approaches in a few weeks, the Chancellor is said to be aiming to address the financial deficit left by the Conservatives by focusing on wealthier property owners.

Although no final decisions have been made, Ms. Reeves has consistently hinted at increased taxes for the affluent as a component of the Budget scheduled for November 26.

A source close to Ms. Reeves informed the Financial Times: “The concept of elevated taxation on high-value properties is well established. The focus now is on the method of implementation.”

Another source stated: “It is crucial for the budget’s political equilibrium to demonstrate that everyone is contributing their fair share.”

Additional options under consideration include a charge based on property value or the application of capital gains tax on the sale of upscale properties, although these are deemed less probable.

Ms. Reeves is also anticipated to introduce a “mansion tax” that would enforce capital gains tax on the sale of the most opulent homes. In a recent statement, she paved the way for tax increases on the wealthiest individuals, citing the significant impact of Brexit and austerity on public finances.

The amount homeowners contribute in council tax, a local government levy on residential properties, varies according to property banding, ranging from band A for lower value properties to band H for higher value ones.

The proposal to introduce new council tax bands for the most expensive homes in England was initially considered by former Conservative Chancellor George Osborne in 2012.

Ruth Curtice, head of the Resolution Foundation think-tank, commented: “I could envision the implementation of an enhanced council tax for high-value properties — it represents a method to tax wealth.

“While this alone may not entirely resolve property tax issues, given that council taxes are already paid, it would entail the affluent contributing a bit more.”

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