Sir keir starmer urged to 're‑evaluate' council tax raising stealth tax concerns


Sir keir starmer urged to 're‑evaluate' council tax raising stealth tax concerns

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09:50, 04 Jun 2025 Sir Keir Starmer and Chancellor Rachel Reeves are facing mounting pressure to "re-evaluate" Council Tax bands due to "updated property values." This


would be seen as a "revenue-raising measure," but it risks hammering millions of homeowners that are already struggling with mortgage repayments. In effect, hiking Council Tax


bands in some regions and shutting down tax breaks would be seen as a stealth tax to help boost Britain's ailing economy. READ MORE: CREDIT CARD CUSTOMERS CAN SAVE £1,679 'BEFORE


START OF SUMMER' WITH EASY MOVE The Organisation for Economic Co-operation and Development (OECD) recently downgraded the UK’s outlook and called for new measures to be implemented to


support the Treasury. The measures in question would involve revaluing council tax bands based on current property prices. Article continues below The OECD explained: “A balanced approach


should combine targeted spending cuts, including closing tax loopholes; revenue-raising measures such as re‑evaluating council tax bands based on updated property values; and the removal of


distortions in the tax system.” The organisation also voiced concerns over the UK's public finances, adding: “Currently, very thin fiscal buffers could be insufficient to provide


adequate support without breaching the fiscal rules in the event of renewed adverse shocks.” “The state of the public finances is a significant downside risk to the outlook if the fiscal


rules are to be met.” The current Council Tax system is based on property valuations from 1991, when the average house price was around £57,000. Today, the average house price is over


£280,000, but Council Tax bands have remained unchanged. The banding was also a rushed job at the time, as councils raced to meet the 1991 deadline to get every property placed within them.


Article continues below MoneySavingExpert.com explained: "They didn't have time to get the detailed information together, so [estate agents] set about doing it quickly by pairing


up and driving down countless streets, allocating each property a band with just a glance. "They became known as 'second-gear valuations' as they mostly never even stopped


their cars, never mind got out of them." In a separate interview, OECD chief economist Álvaro Pereira was blunt about the need for painful decisions, saying: "In order to tackle


all these problems, especially when you have very high debt already, you need to work both on the revenue side and on the expenditure side; that is why sticking to fiscal rules and being


able to maintain fiscal discipline is quite important.”