Andy Burnham facing pressure to raise council tax on Britain’s most expensive homes

A cross-party group of MPs has urged the incoming Prime Minister, Andy Burnham, to allow local authorities to increase council tax by as much as they wish, marking a significant shift in the debate over property taxation in England. The call comes amid growing concerns over the fairness and relevance of the current council tax system, which relies on valuations dating back to 1991. The proposed reforms aim to create new tax bands for the most valuable properties, with the goal of making the system more reflective of today's housing market and more equitable. The push for change follows recent discussions around a planned “mansion tax” targeting properties valued at £2 million or more, which is set to begin in April 2028. Under this measure, homeowners of such properties could see their annual council tax bills rise by at least £2,500, with potential increases reaching £7,500. However, there are indications that the threshold for this tax may be lowered to £1.5 million, potentially expanding its reach to include a broader range of high-value homes. This development adds to the pressure on Burnham, who is expected to assume leadership of the Labour Party soon, to take a firm stance on council tax reform. The all-party parliamentary group (APPG) on local government has released a report advocating for the introduction of additional council tax bands, arguing that the current system is outdated and fails to account for substantial changes in property values over the past three decades. According to the report, these new bands would help align council tax payments with the true value of properties, thereby making the system more progressive. The APPG suggests that this initiative could serve as a stepping stone toward a comprehensive overhaul of the entire council tax framework. Burnham has previously expressed dissatisfaction with the current structure, calling it “not justifiable.” His position aligns with the APPG's recommendations, suggesting a willingness to explore more flexible approaches to council tax assessment. The proposed changes would enable councils to adjust tax rates independently, without requiring approval from central government, thus granting them greater autonomy in managing local finances. Despite these proposals, some experts caution against the immediate implementation of new tax bands, arguing that they may not resolve the deeper structural issues within the council tax system. Peter Stimson, director of mortgages at MPowered Mortgages, criticized the plan as a superficial solution, likening it to a “vote-winner” rather than a meaningful reform. He emphasized that the current system is “hopelessly outdated” and that widespread revaluations of properties are necessary to ensure fairness and accuracy in tax assessments. Campaigners have also raised concerns about the implications of giving councils more control over tax increases. John O’Connell, chief executive of the TaxPayers’ Alliance, warned that removing referendum requirements could lead to a lack of accountability, allowing local authorities to impose higher taxes without sufficient oversight. Critics argue that this approach risks placing an undue financial burden on local residents, particularly the middle class, who may find themselves disproportionately affected by increased council tax demands. As the debate continues, the focus remains on balancing fiscal responsibility with the need for a fair and modernized taxation system. With Burnham poised to lead the Labour Party, his response to these calls for reform will likely shape the future direction of council tax policy in England. The outcome of this discussion could influence not only local budgets but also the broader economic landscape, affecting millions of households across the country.