Farmers Protest Double Tax Threat
British farmers are confronting what they describe as a devastating double tax blow from the government, warning that including agricultural properties in the new mansion tax would unfairly target working businesses rather than luxury homes.
The controversy emerged after Chancellor Rachel Reeves confirmed that properties valued at £2 million or more will face an annual surcharge on top of council tax starting in 2028. This comes just one year after the government removed inheritance tax relief for farms worth more than £1 million in last year's budget.
Political Backlash and Farmer Concerns
The Conservative shadow chancellor Sir Mel Stride accused Labour of "waging a war on farmers", while Liberal Democrat leader Sir Ed Davey stated the government has "no understanding of farmers or farms".
Farmers have been protesting since Ms Reeves's initial inheritance tax announcement last year, even defying a tractor ban to demonstrate outside Parliament on budget day. Although the Chancellor offered a minor concession allowing farmers and small business owners to transfer up to £1 million of unused inheritance tax allowance to spouses or civil partners, agricultural representatives say this doesn't resolve the fundamental issue.
Gavin Lane, president of the Country Land and Business Association, told Sky News: "A farm is not a luxury home. It is a working business. If a tax built for high-value homes were ever stretched to cover barns, grain stores, or the land a farmer needs to run their business, it would hit people the policy was never written for."
Mansion Tax Details and Consultation
The mansion tax, officially termed the "high-value council tax surcharge", will establish four bands:
- Properties worth between £2m and £2.5m: £2,500 charge
- Properties worth £5m or more: £7,500 charge
While the two middle bands and their corresponding charges weren't disclosed by Ms Reeves or the Office for Budget Responsibility, the surcharge will be adjusted annually according to Consumer Price Index inflation.
A government spokesman declined to exclude farms from the tax, confirming that "there will be a consultation that will look at different cases" for the mansion tax. The Valuation Office Agency, responsible for property valuation for council tax and business rates, will conduct this consultation.
Farmers argue that many agricultural operations will still be forced to sell land or cease operations entirely due to combined tax pressures, despite the recent inheritance tax adjustment. They emphasize that their properties represent functional business assets rather than luxurious residential estates, making them inappropriate targets for a tax designed for high-value homes.
