Scottish Government consultation – Council Tax High Value Property Bands (Mansion Tax) – joint CIOT and LITRG response

The CIOT and LITRG have submitted a brief joint response to the consultation on proposals to add two additional bands for residential properties with a value of at least £1 million on 1 April 2026.

The consultation consisted of two multiple choice questions and the option to add extra comments, subject to a limit of 1,500 characters.

As we do not normally comment on rates, we have selected the option “Don’t know” in response to the two questions that ask respondents to indicate their preferred option for a relative tax rate for each of the two new bands.

We note that the Scottish Government will refer to responses to the consultation on the Future of Council Tax in Scotland when considering broader reforms to the Council Tax system in Scotland and affordability protections and transitional arrangements in respect of the introduction of two new bands for high value properties.

This proposal demands a targeted revaluation. Concerns are that 99% of valuations will remain outdated by over 35 years, and the introduction of a parallel valuation system (most properties will have values as at April 1991; a few, higher value properties will have values as at April 2026) may lead to valuation challenges.

The proposal involves the addition of two extra Council Tax bands. It does not create a separate tax charge. This should make it easier for councils to administer and taxpayers to understand. However, on that basis, we would caution against the term “Mansion Tax”, as that makes it appear like a new tax and separate charge.

The proposals will not address the overall regressive nature of Council Tax, or various other issues that arise as a result of the use of outdated valuations.

We reiterate that fairness (the rationale for this proposal) is subjective. Our view is that for a tax to be fair it must tax the base that it aims to tax, and the tax base must be accurately valued.