Care England CEO warns government would be making a “policy error” if adult social care premises operators were liable for new high value council tax surcharge.
Care homes must be made exempt from the proposed new high value council ‘mansion tax’, which will charge a higher rate to residential owners of properties worth £2m or more, ministers have been told.
In a letter sent to the Housing, Community and Local Government secretary Steve Reed, Care England chief Professor Martin Green warned that care homes and other adult social care settings do not fit the category the new levy aims to tax as they deliver statutory care and support for – and often funded by – the state.
Care homes would need to find an extra £25-33 million a year to pay the new tax – which would need to be funded either via higher charges to local authorities and NHS commissioners or via a reduction in service investment, capacity, or provision, he warned.
“Either route is economically circular and operationally harmful” and would “undermine market sustainability, cut across the Government’s stated ambitions for social care reform, and risk limiting access to care for people who rely on these services every day,” he writes in the letter, which was also copied to the Chancellor Rachel Reeves, the Health Secretary Wes Streeting and the care minister Stephen Kinnock.
In practice, this would not represent genuine new revenue,” Professor Green writes.
“Providers and public commissioners do not have the financial capacity to absorb new property-based costs or prolonged uncertainty without direct consequences for services,” he adds.
The new annual tax is slated to come into force in two years’ time from April 2028 and will be collected by local authorities on behalf of central government. Properties above the £2 million threshold will be placed into tax bracket bands based on value, with annual levies ranging from £2.5k £7.5k - and set to increase annually in line with CPI inflation from 2029-30 onwards, the government has said.
It also said it would launch a consultation on the proposals including “a full set of reliefs and exemptions” in early 2026.
However, Professor Green said in the letter it would “not be appropriate” to leave the need for care home exemption to consultation, arguing they should be “excluded from the surcharge in full.”
