Ed Balls tweaks Labour's mansion tax proposals to match Lib Dems

The proposed mansion tax would be levied on properties worth more than £2m (Getty)

Ed Balls, the shadow Chancellor, announced changes to Labour’s mansion tax plans tonight, to bring the policy closely in line with Liberal Democrat proposals.

The charge would be levied on properties worth more than £2m, which would be increased in line with house price inflation. It would rise in bands of £2m-£5m, £5m-10m, £10m-20m and £20m or more.

The Lib Dems also want to bring in a mansion tax at £2m, and introduce higher tax bands on even bigger properties.

Labour’s scheme is designed to raise money for a new starting 10p starting rate of income tax.

Mr Balls also said householders who could not afford the tax, such as elderly people living alone in the family home, would be allowed to defer payments until the property was sold.

“Labour will only support a mansion tax that is fair to those who are asset-rich but cash-poor,” he wrote in the London Evening Standard. “I am clear the mansion tax must be done in a fair way.”

He asked: “How can it be right that the foreign buyer last month of a £140m flat in Westminster will pay just £26 a week in council tax, the same as the average value property in that council area?”