Kirstie Allsopp slams Reeves mansion tax plans as she quashes claims of sexism against Chancellor

The host of Location, Location, Location told LBC's Tonight with Andrew Marr that the plans to levy a new annual charge on houses worth more than £2 million was "dreadfully inefficient" and accused the Chancellor of "not listening to the experts".

Kirstie told Andrew: "A property is only worth what people are prepared to pay for it. So that is the problem with this tax."

Ms Reeves hopes to raise between £400 million and £450 million, which will be collected through council tax bills.

The hike will hit more than 100,000 of the most valuable properties, which will be banded depending on their value.

The existing council tax system will apparently be used as the basis for the charge by the Treasury, as it revalues 2.4 million of the most valuable properties across bands F, G and H.

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Kirsty added: "There are many, many very wise economists and people who have said don't do this.

"Tim Leunig, who is one of the most respected professors at the LSE, said in the Treasury Select Committee the week before last, a mansion tax is such an inefficient way of raising taxes, we're better off having a whip round in the Select Committee."

On the effect of the proposed levy, Kirsty said: "It's a chain, it's an ecosystem. It's like a bowel, you have to put things in to get stuff out. And that isn't happening, and the whole market is slowing down.

"What it does to 'ordinary people' is that if at the top end there's problems, a lot of people who work in the industries that service those top end houses go out of business."

A broader version of the tax was initially planned, which would have started at £1.5 million and affected 300,000 households.

But the threshold was raised amid concerns the original bar would impact people who are "asset rich and cash poor".

People will be able to defer paying the tax until they move house or die, to avoid situations where they may have to sell their homes to cover the cost.

Reeves' plan could lead to a slowdown at the top of the housing market, the Office for Budget Responsibility has said.

The budget watchdog highlighted concerns that fewer properties would be sold as a result of the policy.

But a government source said the impact on the housing market is expected to be minimal.

A Whitehall source said: "The OBR has factored in a behavioural response to this with a knock-on effect on the housing market. It has a wider impact."

The tax will not be implemented until 2028 at the earliest, when the revaluation of the top three bands has been concluded.

Lucian Cook, head of UK residential research at Savills, said: "You don’t want to undermine the housing market at a time you’re trying to build 1.5 million homes. There is a risk there will be a trickle-down from the top of the market.

"If they went too punitive there is also a risk of more capital flight. This is a compromise measure which looks much more about righting the perceived wrongs of the existing council tax system rather than looking to raise significant revenue."

Reeves is planning several tax rises in Wednesday’s budget after dropping plans to break Labour’s manifesto pledge and increase the basic rate of income tax.

Low earners and those on benefits will be protected from the worst of the tax rises, the Chancellor told Labour MPs last week.

The two-child cap on benefit payments will also be scrapped, a move that will cost £3 billion a year, while benefits will be increased in line with inflation.

Reeves’ initial plan to overhaul welfare was abandoned after her own party’s backbenchers threatened to revolt.

A freeze on income tax thresholds for two years will also raise £8-£10 billion, but will mean more than 10 million people will be higher-rate taxpayers by the end of the decade.

Elsewhere, there will be a tax raid on pension contributions - which could be worth as much as £4 billion - as well as a gambling tax, a pay-per-mile tax on electric cars and a tourism tax.