Ministers ignoring residents' Mansion Tax concerns, warns leading London council

The government’s latest response on ‘Mansion Tax’ leaves fundamental concerns unanswered, Richmond Council has warned.

The response fails to address serious worries from vulnerable and asset-rich but income-poor households, the council says. Residents would also face the charge without the money raised being used to fund services in Richmond. 

In a letter sent to Ministers today, Councillor Gareth Roberts, Leader of Richmond Council, says the government has not accepted its calls for meaningful relief for residents unable to afford the charge and locally appropriate deferral thresholds. 

"We continue to fight this tax on behalf of our residents, many of whom have lived in their homes for decades, raised families, contributed to their communities and grown older locally," Cllr Roberts said. 

"In many cases, the value of their homes has risen dramatically, while their incomes have stayed largely the same or fallen and their personal circumstances may have changed. 

"The tax assumes people in these homes, most of which are certainly not mansions, have high incomes, and does not take into account the cost of living in London. Either that or ministers expect elderly taxpayers to sell up and move away from their friends, families and the places they call home."

Mansion Tax is due to be paid by the owners of homes in England worth £2 million or more. 

But in reality, Richmond, Kensington and Chelsea, Westminster and Wandsworth estimate that their residents could pay around £275 million under the scheme, more than half of all the money the policy is expected to raise nationally. 

Cllr Roberts added: "Whitehall’s Mansion Tax raid is disproportionately targeting taxpayers in just four London boroughs. Yet their 28-page response to the consultation mentions London just twice.  

"So, it is clear this government is happy for this to be a direct tax grab on London, and the evidence from the communities expected to bear the greatest burden is being ignored."

The government says Mansion Tax revenue will support local government services nationwide but has not explained its distribution or guaranteed meaningful benefits for the communities paying most.

Councillor Jim Millard, Deputy Leader and Lead Member for Finance, said: "We are still in an absurd position where our residents face an alarming new charge and not a penny will go to fund services here in Richmond.

"If they are expected to pay the tax, the absolute minimum requirement should be clarity on where their money will be spent and some assurance that it will not just be used to fill funding gaps elsewhere in the country."

In the letter, the council also expresses concern that its call for a London-specific income threshold for deferring payment to reflect the capital’s higher living costs has been rejected. 

It also continues to argue that including 'Council Tax' in the official High Value Council Tax Surcharge name of the charge is designed to confuse residents and make them think it is locally set. Local authorities will not set its threshold, rates or principal rules, or control how the proceeds are distributed. 

Read the letter in full.