Wandsworth, Richmond, Westminster and Kensington and Chelsea borough councils believe their residents will be disproportionately impacted by the ‘mansion’ tax increase
Four London councils have written a joint letter to the Government opposing plans for a new ‘mansion tax’. The law changes due to come into effect in April 2028 will see people who own homes worth more than £2 million pay a charge of £2,500 per year.
This is part of the wider fairer share campaign that new Prime Minister Andy Burnham supports, which will see less well-off areas in other parts of England get greater access to public funds. The letter, written by Wandsworth, Richmond, Westminster and Kensington and Chelsea councils, argues the four boroughs could end up paying £275 million per year through the new tax, which is more than half the revenue expected to be raised across the UK.
It also expresses concerns that landlords affected by the surcharge will pass these additional costs on to their tenants, and that homeowners who have seen their house prices rise in recent years but remain on modest incomes will be unfairly affected. Supporters of the fairer share scheme believe these measures are needed to change the ‘outdated’ tax system.
London residents, particularly in the inner boroughs, generally enjoy a low council tax compared to the rest of England. Residents of Westminster, where the average property is worth well over £1 million, find themselves mostly in Band G, paying £1,749.25 in council tax each year. Meanwhile, someone living in the City of Nottingham in a similarly valued Band G property would pay an eye-watering £4,592.32 per year.
This is because many London boroughs have other ways to raise income – such as business rates on high-end shopping streets – which lessens the strain on residents. But Robert Morritt, leader of Wandsworth Council, has fought back against these changes – and is believed to be plotting a record 160 per cent council tax rise due to wider Government funding cuts.
“We won’t get to keep a single extra penny raised, with Wandsworth residents hammered to pay for those elsewhere,” he said. “Why should an additional tax on our residents’ houses be spent so far from their homes?”
Gareth Roberts, leader of Richmond Council, said the government “is seeing Richmond residents as cash cows that they can milk to fix funding gaps elsewhere in the country, irrespective of whether they can afford to pay this new tax”.
Elizabeth Campbell, leader of Kensington and Chelsea Council, said: “This is not a tax carefully targeted at the very wealthy. It lacks nuance and will hit pensioners, families and long-standing residents whose homes have risen in value while their incomes have not.”
Paul Swaddle, leader of Westminster City Council, said high property values “do not always translate into high household incomes, and it risks creating unfair outcomes for residents whose property value does not reflect their ability to pay”.
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