Rachel Reeves could hit homeowners with a new ‘house price tax’. (Image: Getty)
Rachel Reeves could be plotting a fresh tax raid on homeowners as she scrambles for ideas before her second Budget. A new “house price tax” could threaten middle-class homeowners if council tax is scrapped and and replaced with an annual charge based on house price. Ministers said they were considering “options for reform” when asked by the Tories about the impacts of the tax.
Local government minister Alison McGovern responded: “The Government remains committed to keeping all taxes and elements of the local government finance system under review. The Government will continue to monitor the effectiveness of the system and consider options for reform where there is clear evidence that change would deliver better outcomes for residents and councils alike.
The move would scrap council tax and replace it with a charge based on house prices. (Image: Getty)
“The Chancellor makes tax policy decisions at fiscal events.”
Shadow housing secretary James Cleverly responded to these comments, slamming the Chancellor as “desperate”. He said: “Just weeks ago we learnt of Labour’s secret plot to hike council tax by a staggering £11 billion over this Parliament.
“Now it seems they’re looking for new ways to charge you even more just for having a place to live.
“Having downplayed the prospect of changes to taxes on family homes, all of a sudden Labour have changed their tune, raising the worrying spectre of new property taxes at the Budget.
“This is anti-aspiration and will inevitably result in higher costs for Middle England. Rachel Reeves is desperate to take more of ordinary people’s cash to pay for her economic incompetence, while Reform-run councils are set to hike council tax too.”
Under the “house price tax” system, people with large gardens or who have carried out improvements to increase the value of their home would be hit the hardest.
There have also been reports of plans to replace stamp duty with a proportional tax on the value of a home if it’s sold for more than £500,000.
Reports suggested it could be part of a “wider overhaul” of the tax system, by helping to build a model for local levies to eventually replace council tax.
Under the proposed national property tax, the levy would be paid by owner-occupiers on houses worth more than £500,000 when they sell their home. The amount would be determined by the value of the property and a rate set by the Government.
