Mansion Tax Scrapped in Favour of New Council Tax Bands for the Rich
Updated for 2026
The idea of a “mansion tax” on council tax bands for high-value properties has been debated for well over a decade. Originally proposed before the 2015 general election, the plan would have created new council tax bands for homes worth more than £2 million. While that specific proposal never became law, the question of whether council tax bands fairly reflect modern property values remains one of the biggest issues in local government finance in 2026.
Why Council Tax Bands Still Don’t Reflect Property Values
Council tax bands in England are still based on property valuations from 1 April 1991, over 35 years ago. That means a home worth £500,000 today could sit in the same band as one worth £200,000, simply because their 1991 values were similar. The Valuation Office Agency (VOA) has not carried out a revaluation since the system launched in 1993, despite repeated calls from housing charities, think tanks, and local authorities. Wales completed its own revaluation in 2003, adding a Band I for properties valued above £424,000, but England has yet to follow suit.
This outdated banding system means council tax is widely regarded as regressive. Those in lower-value properties often pay a higher proportion of their home’s worth than those in the most expensive homes. The Resolution Foundation and the Institute for Fiscal Studies (IFS) have both published research highlighting this imbalance, with the IFS calling for a comprehensive reform of council tax in 2026 and beyond.
Could New Council Tax Bands Be Introduced?
There have been periodic discussions in Parliament about adding higher council tax bands. The original mansion tax proposal would have imposed a one per cent annual levy on properties worth over £2 million. More recent suggestions include splitting the current Band H (properties valued above £320,000 in 1991) into multiple tiers, or introducing entirely new bands above it. In the 2025 Autumn Statement, the government acknowledged that council tax reform “remains under review” but stopped short of committing to a revaluation or new bands.
Any change would require primary legislation and a full property revaluation exercise. Given the political sensitivity (nobody wants a bigger bill landing on their doormat), progress has been slow. In the meantime, annual council tax increases continue to push bills higher for everyone, with many councils raising charges by the maximum allowed under the referendum threshold.
What This Means If You’re Struggling to Pay
Whether you live in a Band A bedsit or a Band H detached home, falling behind on council tax can escalate quickly. Councils can apply to the magistrates’ court for a liability order within weeks of a missed payment, and once that order is granted, council tax bailiffs (officially called enforcement agents) can be instructed to collect the debt at your door.
Under the Taking Control of Goods Regulations 2013, bailiffs must give you at least seven days’ written notice before visiting. They cannot force entry into your home on a first visit for council tax debt, and there are strict rules about what fees they can charge. Knowing your rights is the first step to dealing with the situation calmly.
If you are behind with your council tax, you may be entitled to a council tax reduction or an affordable repayment plan. Many people don’t realise help is available until arrears have already built up. For free advice and guidance on council tax debt, bailiff visits, and your options, contact Council Tax Advisors today.