English vicars could be forced out of their homes by Rachel Reeves‘s plans to launch a tax raid on owners of property worth over £2 million, a bishop has warned. David Walker, Bishop of Manchester, said many vicarages across the country will likely exceed the £2 million threshold, making their occupants liable to an annual surchage of £2,500 from April 2028. Some vicars could even face bills of up to £7,500 a year if their properties are worth £5 million or above, prompting Mr Walker to caution that “large” vicarages can be found even in “areas with quite high deprivation”.
Vicars are exempt from paying income tax but they do have to cover council levies, except when the property is owned by the Church of England, in which case it is liable for covering the costs. If congregation leaders are driven out of low-income areas by the “mansion tax”, the impacts will be wide-reaching, Mr Walker said.
He told The Telegraph: “If you look at East London [for example], it wouldn’t be hard to find congregations who are largely struggling in lower-paid jobs in a parish where the vicarage is the only place for meetings to take place.
“There is no way that people in an East End parish would be able to pay this mansion tax on top of everything else they’re paying.”
“I can give permission to a vicar to live outside the parish if it’s necessary,” the bishop added. “But we don’t do that lightly. The whole point of the residence law is they should know their people walking the streets, going to the shops and they should know their community.
“If they end up commuting from the suburbs, you lose that. If we ended up with significant parts of London and the South East where we could no longer sustain that pattern, it would be a hugely detrimental change to how clergy have ministered for parishioners for centuries.”
Mr Walker has called on the government to “carve out” a new law for vicars to make them exempt from the “mansion tax” to ensure parishes don’t lose out as a result.
The Bishop of Manchester also urged Parliament against assuming that London vicarages are “large and luxurious” properties because of their value on paper following Ms Reeves’s Autumn Budget, which hiked taxes to a record high of £26 billion in November.
During a debate in the House of Lords, he said: “A 19th-century Act of Parliament determined that vicars should live in their benefices. Residence ensures that parishioners have easy access to them and that the vicar is a visible face on the streets of the parish, not merely another middle-class commuter.
“The modern vicarage is rarely as large and luxurious as some of former times. However, it needs not only to accommodate the priest and their household but to host meetings, provide a meeting place for parishioners, and provide study and office space.
“Few parishioners will be able to pay this additional tax, nor can dioceses simply absorb the costs. If we are to maintain the important principle of clergy living where they serve, including those from other denominations, I urge the Minister to meet with church representatives so that we can discuss how the existing tax exemptions applying to the residences of ministers of religion can perhaps be extended.”
The Government has been contacted for comment.