Budget 2015: Mansion tax abandoned but council tax rises expected

Property could yet be the focus of some revenue-raising opportunities

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Fears of a so-called mansion tax have receded, at least for the current parliament, but property could yet be the focus of some revenue-raising opportunities.

For starters, Osborne could increase the council tax charge on high-end residential property, reckons Alan Pearce, partner at Blick Rothenburg. “He could introduce an upper band for very expensive houses or simply increase the current levels of council tax so they are more in line with the old rating system had it kept pace with inflation.”

There could also be moves to restrict or abolish principal private residence relief for properties worth more than £2m, which would help generate extra capital gains tax revenue when high-value homes are sold.

Meanwhile higher-earners may no longer be able to claim subsidies for their rent. Under planned changes to housing subsidies, local authority and housing association tenets in England who earn more than £30,000 or £40,000 in London will have to pay market-price rent. The move is expected to raise £250m a year by 2018-2019. It is thought that this could affect 340,000 households, costing tenants on average up to £70 a week.