Prime Minister Boris Johnson is considering imposing a ‘mansion tax’ on Britain’s most expensive homes.
The increased funding would pay for big rises in public spending, reports suggest.
Major cuts to pension tax relief are also being looked at by the Prime Minister and Chancellor Sajid Javid ahead of the looming March Budget.
How do council tax bands work and are they outdated?
Current council tax bands were established in 1991, ahead of a new council tax being introduced in 1993.
As time was short, Government workers were enlisted to slowly drive up and down streets, estimating bedroom numbers and house values.
Estate agents were often used to give a rough idea of the price of homes.
The property price estimates were then put into bands. For England and Scotland the bands are A to H.
If you own a property in England that sold for less than £40,000 in April 1991, it is band A. Most properties are in bands D and E – valued at the time between £68,000 and £120,000. The top band, H, is for homes valued at more than £320,000.
However it might be that your home was put into the wrong band from the outset.
It is not clear what exactly this extra tax on properties – referred to as a ‘recurring wealth tax’ – would involve, The Sunday Telegraph reports.
One possible version of the tax is an added council tax band for even more expensive properties than those fitting in the H band now.
It comes after reports that the treasury are considering slashing pension tax relief to 20 per cent – from 40 per cent – for those making equal to or more than £50,000.
This would allow for an extra £10billion per year, the Financial Times reports.
Chief executive of the TaxPayers’ Alliance John O’Connell said: ‘It seems to be a misunderstanding of what the Tories’ new voters were looking for.
‘They may be new converts to the message, but they still expect the Conservatives to be the ones backing them when they succeed.
‘Levelling up doesn’t mean cutting other people down.’