Local councillors have slammed Rachel Reeves over her so-called mansion tax plans. The Chancellor has been accused of “misleading” the public over the new High Value Council Tax Surcharge (HVCTS), announced in November’s Budget.

The levy, set to be introduced in April 2028, is placed on owners of homes in England worth £2 million or more. Funds raised from the levy will reportedly go straight to the Treasury, however town hall chiefs are believed to be furious as it has been labelled as a “council tax”. Council representatives have complained to the Government, claiming this is “misleading” as the name of the tax actually suggests cash raised would be going to local town halls.

Cllr Elizabeth Campbell, leader of the Conservative-led Royal Borough of Kensington and Chelsea, told The Telegraph: “If they want to reform local government taxes, they should do that. But don’t pretend this is about solving council tax problems.

“This is an underhand way of putting a wealth tax on property. Let’s call a spade a spade. If they want to be socialist, be up front about it.”

She added: “The word council tax means we levy it on occupiers, it is a local tax, raised locally, to be spent locally. This is not that – it is a tax on the owners not the occupiers. It has nothing to do with local services. We won’t see a penny of it.”

The Local Government Association (LGA), which represents councils, has also voiced concerns.

Cllr Pete Marland, chair of the association’s local government resources committee, said the “founding principle” of council tax is that it funds local services and local authorities are accountable for it.

Home-owners in London and the south-east are expected to be hit hardest by the tax plans.

In response to The Telegraph report, a Treasury spokesperson said: “This tax will be paid alongside existing council tax and collected by councils.

“Revenue will be used to support funding for local government services, with further detail set to be set out at the next spending review.”