Westminster City Council will seek ministers’ permission to set an additional council tax rate on homes worth £10m or more, in a bid to raise money from those with the “broadest shoulders” and freeze the rate on lower bands.
The council said it would ask owners of “super prime” properties to pay an additional £1,376 on their council tax bill voluntarily. It will then lobby the government to table an affirmative order to allow it to introduce the new band in time for 2018-19 bills in April.
The authority estimates around 2,000 properties would be affected. The new rate would be double the existing band H, and would raise around £2.75m.
A questionnaire will be sent to 15,000 band H properties this month asking whether those in the most expensive homes would be prepared to pay the higher rate voluntarily.
The council admitted it didn’t know whether anyone would pay.
A Westminster spokesperson said: “This is an experimental scheme and if it remains voluntary we will have no powers to compel anybody to pay. However, should we be given the powers we are asking for from government then we will be able to operate this in the same we do council tax.
“This is about creating a fairer system that makes it easy for those who want to contribute more to do so.
“Property prices in super prime properties in London have increased significantly in the decades since the council tax was introduced. There should be an obligation on those with the broadest shoulders to pay for local services.”
Council leader Nickie Aiken (Con) announced the initiative in yesterday’s Sunday Times.
She said: “Westminster is home to some of the poorest and richest people in the country and some of the most expensive real estate in the world.
“But while there is a reality to the cost of living in a capital, this is a council and a government committed to fairness. There is more we can do to help those who are struggling to pay the bills.
“One way of doing that is via a voluntary supplement linked to the top council tax band. There is no appetite from central government to revaluate council tax, but we believe we have come up with a method which will allow the well-off to voluntarily help those just about managing.
“This scheme might have its cynics, but I have spoken to very wealthy people who want to help the borough more. The voluntarily scheme we are proposing is a vehicle for them to do just that.”