Chancellor Reeves Signals Potential Property Tax Hike in Upcoming Budget
London, UK – Chancellor Rachel Reeves is signaling a potential overhaul of property taxation, sparking concerns of a new levy on homeowners as the Labor government seeks to address a £30 billion shortfall in public finances. The move, hinted at by ministers, could see a shift away from council tax towards an annual charge based on property values, effectively introducing a form of “mansion tax” impacting a wider range of homeowners than previously anticipated.
The possibility of new property levies comes as Labour openly discusses options for reform, with the details expected to be unveiled in next month’s Budget.While the initial focus appeared to be on higher-value properties, the scope of the potential tax has raised anxieties about its impact on middle-class households.
Experts caution that such a tax could further dampen activity in the housing market. Neal Hudson, founder of Residential Analysts, warned, ”Ther’s a danger this will have some fairly negative impacts. The top end of the market has been stagnating for the last decade already as it’s been hit by higher rates of stamp duty.”
Lucian Cook, head of residential research at savills, emphasized the complexities of assessing wealth based solely on property value. “There’s a big difference between someone in a £2m house without a mortgage and someone with a sizeable mortgage. So it doesn’t necessarily capture net wealth at all,” he stated.
Reports suggest the government is considering scrapping council tax altogether in favor of the new property-based charge. The move is the latest indication of the Chancellor’s willingness to explore notable changes to the tax system to stabilize the nation’s finances.
