The Council House Tax is coming soon

Nick Forbes


The Housing and Planning Bill working its way through parliament presents some of the most drastic and devastating legislation ever introduced by a Conservative Government – and that’s saying a lot. 

George Osborne is finalising plans for a new levy on councils to fund his Right to Buy sale of housing association properties, a levy he will collect through the enforced sell off of higher value council homes.

This is bad enough, and councils are already facing up to that challenge. But the details of how this will work are even worse.

The Chancellor seems to be planning to take this money from councils before they have even sold those houses, introducing an annual ‘council housing tax’ taken from the Housing Revenue Account we use to maintain council homes and spending it instead on a Tory bribe to voters.

The indications are that the government will devise a formula which will take into account each council’s ability to sell “high value” properties and then levy the council for their estimated proceeds from these “sales”.  This will have a deeply damaging impact upon our ability to maintain the decency standards of our stock or build new council housing. 

To put it into some sort of context, this is the equivalent of the government writing to every car owner in the country and telling them that, since you might eventually sell your car, they’re going to start taxing you on that sale now, regardless of whether you ever actually sell the car. And since you might buy and sell other cars in the future they’ll repeat the tax every year, again and again. 

Voters need to be told that this government is no longer satisfied with just taking your money, they are now taking your homes as well. Because that is what councils homes are – they are a public asset held to ensure everyone has access to a good home and a trusted landlord. 

In the last parliament the Mansion Tax was opposed by the Tories because it targeted the rich; In this parliament we see a council housing tax being backed by the Tories because it only hurts those they consider beneath them.

And this council housing tax goes far further than anything Thatcher sought to do. The  Right to Buy threat in the 1980s saw at least some of the proceeds from the sale of council houses handed to local authorities after the sale had gone through. Now, George Osborne wants to raid our funds before we’ve even collected them, taking money even if the sales never materialise.

This council housing tax is not a plan which will help families find a home; this is an unscrupulous con in which councils that cannot afford to have money taken from them are taxed to fund the sale of yet more much needed social housing.

The unavoidable conclusion is that some in government simply do not want good quality homes to be available for those who they feel haven’t earned them.

“Forcing councils to sell off the good stuff and leave the rest for the people at the bottom” might not be a phrase we actually read in the Tory manifesto, but we all know it was there. We are seeing the introduction of a council housing tax which will not only remove a substantial part of the safety net council housing can provide, but also the pride it brings to those who live in a good home.

This is where the next fight for Labour should be. If we don’t take the Tories on over this policy and rise to meet this threat then we will be counting the cost for generations.

Nick Forbes is leader of Newcastle City Council

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