Labour planning secret tax on 'nice houses'

Millions of middle-class home owners living in desirable neighbourhoods are facing higher council tax bills after the next election following a secret Government exercise to assess the "niceness" of different areas.

Tax inspectors have divided England into 10,000 new "localities" with each neighbourhood ranked on the socio-economic class of its residents and environmental factors such as crime and traffic levels.

The inspectors have even purchased demographic data disclosing how many company executives, pensioners or students live in particular streets, The Daily Telegraph has learned.

This has been collated on a secret database which is being used to assess the desirability of neighbourhoods to help determine council tax bills if Labour wins power again at the next election.

The Conservatives have branded the proposal "a nice neighbourhood tax" which will penalise middle class families struggling to cope with the economic downturn. It is feared the revaluation will quickly be implemented if Labour wins the next election to help fund the growing deficit in Britain's public finances.

A revaluation of council tax bills is considered politically explosive and has already been delayed once amid widespread fears that it would be used to increase taxes.

Each of the 22 million properties in England is currently placed into one of eight council tax bands, depending on its value. These valuations are based on property prices of the early 1990s, long before the property market boom. Council tax bills for each band are then set by individual local authorities.

Although house prices have dipped during the recession, even the most pessimistic forecasts has them returning only to the levels of 2004 before they start to rise again.

......Last night, Eric Pickles, the Shadow Local Government Secretary, said: "The cat is out of the bag that Gordon Brown's tax inspectors are preparing for a council tax revaluation after the general election. Labour Ministers have developed a 21st century Domesday Book – carving up England's towns and villages into anonymous

'localities' for taxation. Family homes in middle England which enjoy lower rates of crime, less traffic or a friendly community now face the prospect of another tax bombshell. Given the chance, there is nothing that Gordon Brown will not tax."

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