Lib Dem conference

Council tax hike on the cards for £1m home owners

Lib Dems press for new council tax bands to take into account leap in value of most expensive houses

People with homes worth more than £1m face a rise in their council tax bills as the Coalition Government considers new taxes on wealth.

The idea will be pushed by the Liberal Democrats when George Osborne, the Chancellor, tables his demands for more spending cuts.

Nick Clegg will demand two or three new council tax bands at the top of the scale as an alternative to the Liberal Democrats' favoured mansion tax on homes worth more than £2m, which David Cameron has blocked. The eight bands on which council tax is based in England – from Band A (up to £40,000) to Band H (over £320,000) – have not changed since 1991 even though property prices have risen sharply. This means that all homes worth more than £320,000 in 1991 pay the same council tax in their local authority area.

Senior Liberal Democrats suggested that the council tax plan could target the same householders as would be affected by a mansion tax, originally set at £1m but later raised to £2m. Mr Osborne is said to be open-minded about the new proposals, while Mr Cameron is more cautious. The Conservatives are thought unlikely to want to hit people with homes worth less than £1m.

A senior Liberal Democrat source told The Independent: "A mansion tax remains our top priority. We have not been able to persuade the Conservatives of its merits but we will continue to make the case for it. However, we believe the best type of wealth tax is one that targets high-end property because it would be difficult to avoid."

Liberal Democrats point out that higher bands could be added at the top of the scale without a time-consuming revaluation of all properties, which would be politically sensitive in the run-up to a general election and could provoke a flood of appeals from aggrieved householders. A house worth £320,000 in 1991 would be worth about £750,000 today, and sources indicate the new bands would only affect those whose property is now valued at more than £1m. This would prove more politically acceptable to the Conservatives than hitting people whose homes were worth less than that.

The shake-up could form part of the negotiations between the Coalition parties ahead of Mr Osborne's autumn statement in December or a government-wide spending review due next year. In an interview with The Independent on Saturday, Mr Clegg revealed that the Liberal Democrats would not sign up to a new round of spending cuts unless the Tories agreed to new taxes on wealth – a message he has reiterated at his party's Brighton conference.

The Deputy Prime Minister said yesterday: "I don't think it's right that someone in a £4m palace in the middle of London pays the same council tax as someone in a four-bedroom family home elsewhere in London."

A senior Liberal Democrat source said: "We want to do more on a wealth tax. Work is being done at the moment and council tax is one of the things we are looking very closely at. There is no reason that council tax would have to go up for everyone. It does not have to be uniform across bands.

"It's very odd that people who have been lucky enough to be able to buy a large house enjoy a freeze, just as people who have a very small property. We have the building blocks in place to do something on property – obviously they would fall short of a mansion tax, but it would still be a move towards it."

Lord Oakeshott, the party's former Treasury spokesman, will propose an amendment at conference today, saying a mansion tax should remain the Liberal Democrats' top priority "as a first step towards wealth taxation designed to reduce inequality".

Life & Style
Sampling wine in Turin
food + drink...and abstaining may be worse than drinking too much, says scientist
Arts & Entertainment
Kingdom Tower
architecture
Sport
Jose Mourinho restrains his assistant manager Rui Faria, Fabio Borini celebrates his winning penalty and Connor Wickham equalises for Sunderland
sportChelsea 1 Sunderland 2: Deafeat is extra bitter as former Chelsea player Fabio Borini scores late penalty to seal victory
Arts & Entertainment
Game of Thrones writer George R.R. Martin has been working on the novels since the mid-Nineties
books
VIDEO
Have you tried new the Independent Digital Edition iPad app?
News
Easter a dangerous time for dogs
these are the new ones. Old ones are below them... news
News
Brand said he
people
Sport
Roger Federer celebrates his victory over Novak Djokovic in the Monte Carlo Masters
sport
Voices
Actor Zac Efron
voicesTopless men? It's as bad as Page 3, says Howard Jacobson
Arts & Entertainment
The monster rears its head as it roars into the sky
film
Voices
For the Love of God (2007) The diamond-encrusted skull that divided the art world failed to sell for
its $100m asking price. It was eventually bought by a consortium
which included the artist himself.
voicesYou can shove it, Mr Webb – I'll be having fun until the day I die, says Janet Street-Porter
Extras
indybestFake it with 10 best self-tanners
Arts & Entertainment
Madonna in her music video for 'Like A Virgin'
music... and other misheard song lyrics
News
Much of the colleges’ land is off-limits to locals in Cambridge, with tight security
educationAnd has the Cambridge I knew turned its back on me?
News
peopleOrlando Bloom the pin-up hero is making a fresh start
News
Who makes you happy?
happy listSend your nominations now for the Independent on Sunday Happy List
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition iPad app?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Apprentice IT Technician

£150.00 per week: QA Apprenticeships: This company is a company that specializ...

1st Line Technical Service Desk Analyst IT Apprentice

£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...

1st Line Helpdesk Engineer Apprentice

£150.00 per week: QA Apprenticeships: This company has been providing on site ...

Sales Associate Apprentice

£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...

Day In a Page

How I brokered a peace deal with Robert Mugabe: Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC

How I brokered a peace deal with Robert Mugabe

Roy Agyemang reveals the delicate diplomacy needed to get Zimbabwe’s President to sit down with the BBC
Video of British Muslims dancing to Pharrell Williams's hit Happy attacked as 'sinful'

British Muslims's Happy video attacked as 'sinful'

The four-minute clip by Honesty Policy has had more than 300,000 hits on YouTube
Church of England-raised Michael Williams describes the unexpected joys in learning about his family's Jewish faith

Michael Williams: Do as I do, not as I pray

Church of England-raised Williams describes the unexpected joys in learning about his family's Jewish faith
A History of the First World War in 100 moments: A visit to the Front Line by the Prime Minister's wife

A History of the First World War in 100 moments

A visit to the Front Line by the Prime Minister's wife
Comedian Jenny Collier: 'Sexism I experienced on stand-up circuit should be extinct'

Jenny Collier: 'Sexism on stand-up circuit should be extinct'

The comedian's appearance at a show on the eve of International Women's Day was cancelled because they had "too many women" on the bill
Cannes Film Festival: Ken Loach and Mike Leigh to fight it out for the Palme d'Or

Cannes Film Festival

Ken Loach and Mike Leigh to fight it out for the Palme d'Or
The concept album makes surprise top ten return with neolithic opus from Jethro Tull's Ian Anderson

The concept album makes surprise top ten return

Neolithic opus from Jethro Tull's Ian Anderson is unexpected success
Lichen is the surprise new ingredient on fine-dining menus, thanks to our love of Scandinavian and Indian cuisines

Lichen is surprise new ingredient on fine-dining menus

Emily Jupp discovers how it can give a unique, smoky flavour to our cooking
10 best baking books

10 best baking books

Planning a spot of baking this bank holiday weekend? From old favourites to new releases, here’s ten cookbooks for you
Jury still out on Manchester City boss Manuel Pellegrini

Jury still out on Pellegrini

Draw with Sunderland raises questions over Manchester City manager's ability to motivate and unify his players
Ben Stokes: 'Punching lockers isn't way forward'

Ben Stokes: 'Punching lockers isn't way forward'

The all-rounder has been hailed as future star after Ashes debut but incident in Caribbean added to doubts about discipline. Jon Culley meets a man looking to control his emotions
Mark Johnston: First £1 million jackpot spurs him on

Mark Johnston: First £1 million jackpot spurs him on

The most prize money ever at an All-Weather race day is up for grabs at Lingfield on Friday, and the record-breaking trainer tells Jon Freeman how times have changed
Ricky Gervais: 'People are waiting for me to fail. If you think it's awful, then just don't watch it'

Ricky Gervais: 'People are waiting for me to fail'

As the second series of his divisive sitcom 'Derek' hits screens, the comedian tells James Rampton why he'll never bow to the critics who habitually circle his work
Mad Men series 7, TV review: The suits are still sharp, but Don Draper has lost his edge

Mad Men returns for a final fling

The suits are still sharp, but Don Draper has lost his edge
Google finds a lift into space will never get off the ground as there is no material strong enough for a cable from Earth into orbit

Google finds a lift into space will never get off the ground

Technology giant’s scientists say there is no material strong enough for a cable from Earth into orbit