Consultation opens on Scottish Government's 'mansion tax' proposals

Views are being sought on proposals to introduce a so-called mansion tax to help fund public services across the country.

The proposals were announced in the Scottish Government’s budget by former finance secretary Shona Robison, with new council bands to be created for homes valued at £1 million and £2 million respectively, by April 1, 2026 estimates.

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.

The consultation, which opened on Monday, is looking for responses on possible increases of around £720 and £3,600 above the highest Band H council tax charges.

An indicative scenario in the document could see £1m properties pay £720 more per year, with those worth more than £2m charged an extra £3,600.

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.”

The consultation is due to close on August 24.