Council homes worth over £2m to be spared Reeves' mansion tax
The Treasury is reportedly set to exempt social housing from the controversial levy announced in last week's Budget
Council house tenants in homes worth more than £2million will be spared from Rachel Reeves' 'mansion tax'.
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The introduction of the annual council tax charge - widely dubbed the 'mansion tax' - will mean that from April 2028, owners of properties valued at over £2million will now face the annual surcharge.
The council tax surcharge, announced at last week's Budget, is set to raise an estimated £0.4billion for the government in 2029-30, according to the OBR.
But those living in social housing will be exempt from the annual levy, according to documents published on Wednesday.
A Treasury source confirmed to the Telegraph that social homes would not pay the extra levy.
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Properties liable for the new tax will be determined following an evaluation by the Valuation Office and based on 2026 prices, the government revealed.
According to the leaked OBR document, the new council tax charge will be an addition to existing council tax requirements.
James Cleverly, the Conservative shadow minister for housing, told The Telegraph: “Labour’s new family homes tax is an attack on aspiration and on people who have worked hard and saved hard, who will now have to pay for those who don’t work at all.
“With social housing exempt, people living in expensive properties on the taxpayer’s dime will be able to dodge the new charge.
He added: “Labour dropped Conservative plans for an income test for social housing, and the sale of high-value properties to fund new social homes. And now Labour are taxing hard-working people to pay for homes they describe as mansions.”