One in ten to get £3,000 council tax bill amid new Starmer policy

One in 10 households could soon be walloped with a massive £3,000 council tax bill after Keir Starmer gave permission for the charge to continue to increase by nearly three times the inflation rate.

If the five per cent cap is maintained, the amount paid by an average household could increase by £109 to a total of £2,280 by April.

By 2025-26, 2.5 million families could be paying £3,000 - a rate that over 436,000 pay already.

The new rates would represent 9.6 per cent of all households.

The situation is a stark contrast to six years ago when not a single property in England faced a bill of more than £4,000. 

But that level of charges have now become a reality for 139,000 homeowners – a tally that could almost triple to 375,000 next April.

Housing Minister, Matthew Pennycook was asked in the Commons last week whether the Government would consider imposing extra council tax bands on larger properties - a move the Greenwich and Woolwich MP did not rule the move out.

He said such matters would be considered as part of the local government finance settlement due in January.

He also failed to rule out a reevaluation of people's homes, which could see extensions and improvements made to houses push up council tax rates further.

Some 10.1 million homeowners paid £2,000 in council tax last year, making up 39.6 per cent of the roughly 25.6 million homes across England eligible for the charge, the Telegraph reported.

The existing increase cap would see this figure rise to 12.2million putting nearly half of homes above £2,000 a year (47.9 per cent).

The typical toll in Rutland, the highest in the country, would rise by £127 to hit a record £2,670.

Thousands of families are bracing for the added eye-watering council tax rises next year after Starmer signalled the cap would remain at five per cent.

A government source said the 5 per cent cap would not necessarily translate into a similar tax rise as it would be 'up to individual councils' to decide what to charge.

But most are expected to increase bills by the maximum amount.

Government statistics show the average band D council tax set by local authorities in England for 2024/25 was £2,171, which represented an increase of £106 or 5.1 per cent on the previous year.

The main inflation figure fell to 1.7 per cent in September although it is expected to rise again towards the end of this year, as energy costs go up over the winter.

Labour claims there is a £2.4billion black hole in the finances for local government that would need to be filled with higher taxes.

A Ministry of Housing, Communities and Local Government spokesman said: 'Within the cap the Government have set out, it is for councils to decide on the level of council tax to set.

'In line with the position taken by the previous administration, we're committed to limiting increases to 5 per cent without a referendum to restrict those costs and so residents can have their say on anything beyond that.'

Darwin Friend, of the TaxPayers’ Alliance, is one taxpayer who has urged ministers to curb council waste rather than signing off another round of bill hikes.

‘Taxpayers will be bracing for another penny-pinching year ahead,’ he said.

‘Councils across the UK have either increased council tax or threatened to increase it. While the cap has not been scrapped, the increase of 5 per cent will still hit hard-pressed households.

'The Government needs to crack down on councils to ensure that they are keeping costs to a minimum and delivering front-line services at the best possible value for residents.’

The distress comes as Brits have already been struggling with the cost of living crisis as well as being battered by the Budget's massive tax raid.