Labour is discussing plans to extend the so-called ‘mansion tax’ to properties valued at more than £1.5million, sources confirmed.
More than 270,000 homes could be hit by the tax on property values, particularly in London and the South East, in a move exclusively predicted in The Mail on Sunday.
The MoS revealed on July 5 that incoming PM Andy Burnham could drag thousands of middle-class homeowners into the punitive tax by lowering its current ceiling of £2million to £1.5million.
This would mean householders caught in the lower bracket would have to pay a four-figure sum in annual tax on top of their council tax payments.
Ironically, the PM has previously dismissed this unpopular tax as too ‘symbolic’ and said it leaned into ‘the politics of envy’ when it was championed by failed former Labour leader Ed Miliband in 2015.
Now government sources have confirmed that Chancellor John Healey is indeed looking at plans to widen the mansion tax – or high-value council tax surcharge as it is officially known – in the run-up to his first Budget on October 28.
Housing experts warn that such a move could reduce property sales.
Labour is actively discussing lowering the ‘mansion tax’ threshold to £1.5million (Pictured: Andy Burnham on September 18, 2024)
It comes after the Mail on Sunday exclusively revealed the new PM was going to drag thousands of middle class families into being hit by the punitive tax
The tax was first introduced in last year’s Budget on houses worth more than £2million and was expected to hit 134,000 homes with a levy of £2,500 – £7,500 a year. It is scheduled to come into effect in April 2028.
Extending the levy to properties worth more than £1.5million, would more than double that number to 271,000 homes.
A Whitehall source said: ‘This is seen as the most viable option because the Valuation Office is already doing the work to identify the homes worth more than £2million, so it isn’t a massive change to capture those over £1.5million.’
Two government sources confirmed that lowering the threshold is a ‘live discussion’ in the Treasury, The Times reports.
However, nothing has been firmly decided, amid concerns too many more modest homes would be affected.
