Last-minute Labour row erupts over planned 'mansion tax' ahead of Budget
Under Rachel Reeves’ proposal, as many as 2.4m homes in council tax bands F, G and H would be revalued and hit with an annual tax.
A row has erupted amongst Labour MPs over Rachel Reeves’ plan to introduce a so-called “mansion tax” in her upcoming Autumn Budget.
Listen to this article
The Chancellor is reportedly facing growing pressure from Labour MPs in London and the south-east to scale the policy back over fears the £1.5million-value definition of a mansion could be too low.
MPs fear the policy could see the party haemorrhage votes in wealthier parts of the country and have called on Ms Reeves to increase her definition of a mansion to over £2m.
Under Ms Reeves’ proposal, as many as 2.4m homes in council tax bands F, G and H would be revalued and hit with an annual tax.
Read more: London house prices plummet by £7k on average as buyers brace for Reeves's ‘mansion tax’
One MP told the FT: “There are a lot of talks taking place on this and we’ve been told that the levy will not kick in for homes costing £1.5m. It will be higher than that.”
Another questioned: “Do they literally want to lose every seat in London?”
New figures from the Office for National Statistics (ONS) show the average home lost £7,000 in value, falling to £556,000 in September.
London was also the only region in the UK to record an annual decline, with prices down 1.8 per cent.
Separate data from property analysts LonRes shows sales of homes worth £5 million or more plunged by 65 per cent last month.
The speculation of measures affecting property in the Budget is appearing to dampen prices, but Sir Keir Starmer refused to confirm or deny any such measures will be included on November 26.
Sir Keir was asked about Budget measures on Wednesday at Prime Minister's Questions by Kemi Badenoch, but refused to be drawn on the contents of next week’s announcements.
He said: “The Budget is actually next week, but I can tell her it will be a Labour Budget with Labour values, that means we will focus on cutting NHS waiting lists, cutting debt and cutting the cost of living.”
“This is the first Budget to unravel before it’s even delivered,” Mrs Badenoch said.
If Ms Reeves sets the price at around £1.5m, about 2 per cent of band F houses would be hit with the tax, while 18 per cent of G and 85 per cent of H properties would receive the levy.