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Council Tax Bands to Rise: New Proposal Targets High-Value Homes

  //house-home.news-articles.net/content/2026/02/1 .. -rise-new-proposal-targets-high-value-homes.html
  Published in House and Home on Thursday, February 12th 2026 at 7:20 GMT by Birmingham Mail
      Locales: England, West Midlands, UNITED KINGDOM

London, England - February 12th, 2026 - The Local Government Association (LGA) has put forward a significant proposal that could reshape the landscape of council tax in England. The plan, revealed this week, suggests the introduction of two new council tax bands - D1 and H1 - specifically designed to generate additional revenue for increasingly strained social care services. This move comes amidst growing concerns about the sustainability of social care provision in the face of an ageing population and rising care demands.

The current council tax system, largely unchanged since 1991, is facing scrutiny for its perceived inadequacy in reflecting current property values. The LGA argues that this outdated structure places an unfair burden on some homeowners while failing to capture the full potential revenue from higher-value properties. The proposed D1 band would target homes valued between GBP1,000,000 and GBP1,200,000, while the H1 band would apply to properties exceeding GBP3,000,000 in value. The LGA estimates these new bands could collectively raise approximately GBP2 billion annually - a critical injection of funds for a sector grappling with a substantial funding shortfall.

The Social Care Crisis Deepens

Social care in England is facing unprecedented pressure. Demographic shifts, with a growing elderly population, coupled with increasing life expectancy, are driving up the demand for care services. Furthermore, the complexities of modern healthcare mean individuals require more specialized and prolonged care, adding to the financial strain on local authorities. Successive governments have faced criticism for failing to adequately address the long-term funding challenges within the social care system, leading to a reliance on council tax as a primary funding source.

"Local authorities are on the front line of providing care for the most vulnerable in our society," explained Councillor Mark Crane, LGA Chairman. "However, a severe funding shortfall means we are having to make really difficult decisions about the care we provide. Council tax is a vital source of funding, but the current system is unfair, as many people are paying more than their fair share. We believe that introducing two new bands would help to address this imbalance and generate much-needed revenue for social care."

Criticism and Concerns

The LGA's proposal hasn't been without its detractors. Some homeowners, particularly those whose properties fall within the proposed new bands, have voiced concerns about being unfairly targeted. Critics argue that increasing the tax burden on higher-value homeowners isn't a sustainable solution and could potentially discourage investment in property. There are also concerns that the additional revenue generated may not be ring-fenced specifically for social care, potentially being diverted to other local authority projects.

Several property analysis firms have weighed in, suggesting that while the revenue generation potential is significant, the impact on the housing market, particularly in regions with high property values, needs careful consideration. Some fear it could exacerbate existing affordability issues and potentially lead to a slowdown in property transactions. The National Association of Estate Agents has called for a thorough impact assessment before any changes are implemented.

Public Consultation and Government Response

The LGA is currently engaging in consultations with the government to discuss the feasibility and implementation of the new tax bands. A public consultation is planned in the coming weeks to gather feedback from residents and stakeholders. The government has acknowledged the challenges facing social care but has yet to officially endorse the LGA's proposal. Sources within the Department for Levelling Up, Housing and Communities suggest that all options are being considered as part of a broader review of local government funding.

The success of this proposal hinges on several factors, including government support, public acceptance, and a clear commitment to ensuring the generated revenue is genuinely allocated to improving social care services. The debate surrounding council tax and social care funding is likely to intensify in the coming months, as local authorities and central government grapple with the urgent need to find a sustainable solution for an increasingly vulnerable population.