Furious battle over Budget inside government as Starmer urged to stop mansion tax plan
Starmer urged to stop mansion tax plan before Budget
- Rachel Reeves is reportedly considering a mansion tax on properties valued over £2m to address an estimated £40 billion budget deficit and appease the Labour Party's left wing.
- The proposed tax, an annual 1% charge on the value exceeding £2m, faces significant opposition from some Labour cabinet members, who fear it could deter investment and severely impact the housing market.
- Property experts and economists warn the tax would disproportionately affect London and the South East, potentially leading to a flight of capital, devaluing properties, and disincentivising home improvements.
- Concerns have been raised about the administrative challenges of regular property valuations, which have not been updated in 34 years, and the potential for delayed revenue collection.
- Critics, including Rishi Sunak, argue that such targeted tax increases could hinder economic growth, with some suggesting more fundamental property tax reforms like additional council tax bands or a land value tax as better alternatives.