Families in Scotland could face escalating council tax bills as the Scottish National Party (SNP) government proposes to grant local authorities enhanced 'discretionary powers' for increased 'local flexibility' in taxation.

First Minister John Swinney is already set to introduce a 'mansion tax' in 2028, which will add two new upper bands to the property levy for the most expensive homes. The upcoming Programme for Government signals legislative changes that would provide councils with even greater autonomy over council tax.

The legislation aims to 'modernise aspects of the council tax framework and increase local flexibility through discretionary powers for local authorities,' according to government statements. This move follows recent instances where expanded powers led to significant tax hikes on numerous properties.

In April, councils gained the authority to implement unlimited surcharges or offer discounts on second homes and long-term empty properties. Following this, Glasgow, Highland, and Scottish Borders councils announced premiums of 200 percent, effectively tripling the standard council tax for such properties. In Midlothian, under SNP leadership, a tiered surcharge system was implemented, with homes vacant for extended periods facing surcharges of up to 500 percent, potentially leading to bills nearly six times the standard amount, nearing £10,000 for a Band D property.

Mansion Tax Details

The planned SNP 'mansion tax' will apply council tax bands I and J to homes valued at over £1 million and £2 million, respectively. This is anticipated to generate up to £16 million annually. A July consultation outlined an 'illustrative' Band I annual charge of £4,770, an increase of £720 over the current Band H maximum. An 'illustrative' Band J was proposed at £7,650, a £3,600 rise above Band H.

Separately, a council tax consultation last year suggested revaluing homes and introducing up to 14 tax bands, with potential annual bills reaching £6,515.

Opposition Concerns

Scottish Conservative finance spokesman Craig Hoy expressed alarm, stating, 'Hard-pressed Scots will be deeply alarmed that they could be hit with even higher bills under these SNP plans.' He criticized the SNP's approach, suggesting that 'After years of imposing savage cuts to councils, the SNP’s only answer is to give them more powers to introduce new taxes. John Swinney should come clean on exactly what his Bill will mean for taxpayers.' Hoy urged Mr. Swinney to abandon these proposals and instead ensure adequate council funding by reducing the 'ballooning benefits bill.' He further contended that 'The SNP are hellbent on pressing ahead with these punitive measures that will deliver eye-watering increases in council tax bills. Introducing new taxes is the Nationalists’ only answer to try to plug the £5billion gap they have created in Scotland’s finances.'

A Scottish Government spokesperson commented on the plans, stating that 'potential further powers' would be detailed in the forthcoming Council Tax (Scotland) Bill. They added, 'Ministers have enabled councils to increase charges for second properties while the Mansion Tax on the most expensive properties will raise millions in additional funding.'