PROPOSALS to institute a so-called mansion tax could raise up to £16 million, according to the Scottish Government.
The move was announced in the Government’s budget by former finance secretary Shona Robison, with new council bands to be created for homes valued at £1 million and £2m respectively, by April 1 2026 estimates.
On Monday, the Government released a consultation on the issue, with indicative rates set for the new bands.
Under the current system – which will remain largely untouched apart from the creation of the new bands – councils are allowed to set the rate for band D, with other bands dictated by a formula set by ministers.
An indicative scenario in the document could see £1m properties pay £720 more per year, with those worth more than £2m charged an extra £3600.
Estimates suggest total revenue generated – which would be kept and distributed by councils – would be between £12m and £16m, averaging £500,000 per local authority.
According to the document, £3.5 billion is expected to be raised in council tax this year – meaning the highest estimate would increase cashflow by just 0.45%.
Deputy First Minister Jenny Gilruth said the Government’s approach was “based on fairness”.
“As it stands, some multi-million pound properties have council tax bills that are not materially different from those faced by people living in far more modest homes,” she said.
“Our progressive approach to taxation helps to target investment in economic growth, deliver public services and support cost-of-living measures not available elsewhere in the UK, such as free tuition, free prescriptions and our plans for a £2 bus fare cap across Scotland.
“Additional revenue raised through these new council tax bands will be retained in full by local government to support the local services communities rely on – unlike the UK Government’s proposals for a similar scheme that are set to be returned to the Treasury.
“In launching this public consultation, we are keen to hear the views of people and communities right across Scotland.”
Scottish Greens MSP, Lorna Slater, added: "The launch of this consultation is an important milestone. The mansion tax will raise vital funds for schools, libraries and other local services, while helping to respond to Scotland's housing emergency.
"It is happening because Scottish Green MSPs and housing campaigners made it a priority in budget negotiations.
"Alongside the private jet tax, which was also secured by the Greens, it reflects a simple principle. If we want properly funded public services, we need to ensure that those with the greatest wealth are paying their fair share."
She went on: “This is a significant step, but it can’t be the end of the conversation. There's much further to go if we are to give our services the funding they deserve.
"We need to go further to empower councils, reduce inequality and build a tax system that reflects people's ability to pay.
"With more Green MSPs than ever before, we'll continue making the case for the bold change that is needed to build a fairer and greener Scotland."
The consultation is due to close on August 24.
