Chancellor sets scene for LVT
The High Value Council Tax Surcharge (HVCTS) (“Mansion Tax”) introduced by the Chancellor in her budget of November 2025 has taken four giant steps towards Land Value Tax.
It shows valuation is straightforward. The Valuation Office Agency (VOI) will be revaluing all homes in Council Tax Bands F. G and H. Valuing all land for LVT is a bigger job but equally straightforward.
It faces up to many objections - including the north/south split of land value It also faces up the Daily Mail argument: “what about the property rich but cash poor widow of a fallen hero? It’s not her fault she lives in a £5 million home.”
It is paid by freeholders not tenants. Values will be recorded on the Land Register - just as for LVT.
It is returned to central government. LVT will be collected centrally and government can use it, in all or part, to balance central funding for 100% of all Local Authority services.
Rachel Reeves budget of November 2025 makes it crystal clear why we need Land Value Tax and, unwittingly, sets the scene for its introduction.
The new “Mansion Tax” on homes valued at over £2,000,000 does nothing to change the grossly unfair Council Tax and makes our property taxes even more complicated. More work for lawyers.
The new tax, which increases in bands from £2 million to £5 million, will be collected by Local Authorities (LAs) along with Council Tax but the additional revenue will be sent directly to national government. Land Value Tax is similarly returned to national government for onward transfer to LAs to cover 100% of the costs of their legally required services. However LVT is collected centrally, by HMRC, rather than by over 300 LAs - so resources freed up by LAs can be used to provide local services.
Yes, it is a good idea that those with the most should contribute the most - but not by making things even more unfair and complicated.
By revaluing homes in bands F, G and H, and increasing their tax contribution based on their open market value (as valued by the Valuation Office Agency) , Reeves has opened the door for LVT. Revaluing all homes, and storing that value in the freehold entry of the Land Registry, is the only preparation we need before scrapping all property taxes and replacing them with LVT.
This article from the Guardian covers Richmond in London.
This 5 bedroom house in Richmond is on offer for £2,000,000.
This very similar 5 bedroom house in Derby is on offer for £525,000.
Why the difference?
The two houses are very similar and probably cost about the same in bricks and mortar.
The difference is the underlying cost of land. Richmond is a “highly desirable” area so people are willing to pay more for the land on which their home is built.
Make it simple
Scrapping all our property taxes, especially the hated and unfair Council Tax, and replacing them with Land Value Tax would make things simple, fair and impossible to avoid.
Rachel - you have shown how easy it is to do - now take the next step to make things fairer for all of us.