Rachel Blake, a Labour MP and former Treasury minister, warns against reducing the mansion tax threshold from £2 million to £1.5 million, arguing it would unfairly target family homes. According to Hamptons analysis, lowering the threshold would double the number of affected homes to 272,000, with nearly 80% located in London and the South East. Blake expressed concern about unintended consequences, particularly for homeowners whose property values have increased significantly over time but who may not be able to afford additional taxes.
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A Labour MP, Rachel Blake, has warned against lowering the mansion tax threshold to £1.5 million from its current level of £2 million. This change would result in twice as many homes being affected, increasing the number from 136,000 to 272,000 properties. According to analysis by estate agents Hamptons, one in four detached homes in London would be impacted under the new threshold. The majority of these homes, nearly 80%, would be located in London and the South East region. Blake, who is a former Treasury minister and MP for Cities of London and Westminster, expressed concern that this change could unfairly target family homes. Rachel Reeves previously introduced a council tax surcharge on properties valued at £2 million or more, which will take effect from April 2028. John Healey, Reeves' successor as chancellor, is reportedly considering the reduction to address revenue needs for the Treasury.
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A Labour MP has warned the Government against lowering its mansion tax threshold to £1.5million after it emerged the number of homes hit would double.
Rachel Blake, a former Treasury minister and London MP, said on Tuesday she was 'concerned' about Labour's plans to drop the mansion tax threshold from £2million to £1.5million, as it would unfairly target family homes.
Former chancellor Rachel Reeves last year introduced a council tax surcharge on homes worth £2million or more, taking effect from April 2028.
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Reeves → see → April
Reports suggest her successor John Healey is now considering lowering the threshold to £1.5million as he tries to boost Treasury coffers.
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he → suggest → coffers
But doing so would double the number of homes hit by the tax raid to 272,000, with a staggering one in four detached homes in London brought into scope, according to analysis from estate agents Hamptons.
The charge would also fall disproportionately, with almost 80 per cent of the properties affected in London and the South East.
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cent → do → London
Speaking on the BBC's Politics Live on Tuesday, Ms Blake, the MP for Cities of London and Westminster, said: 'I would be quite concerned about reducing that threshold.
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I → speak → threshold
I think it could have unintended consequences.'
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it → think → consequences
She explained: 'There's a vast deal of difference between £30million, £40million properties where you might not even have people living in them, compared to two-bedroom, three-bedroom family properties where their value has changed significantly over the last 40 years since the original council tax was designed and the valuations took place.'
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valuations → explain → place
Reports suggest Chancellor John Healey is considering lowering the mansion tax threshold to £1.5million as he tries to boost Treasury coffers
While Ms Reeves in November vowed the mansion tax would address a 'longstanding source of wealth inequality', lowering the threshold to £1.5million would see double the number of terraced homes in London forced to pay up.
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number → suggest → London
A senior Labour MP said: 'Anyone who's got a home that's worth over £1million is going to feel that this is something that will threaten them in the future, even if not right now.
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that → say → future
If you look at those homes, they're terraced houses, semi-detached houses, places that people bought before prices went up, and they don't have the cash lying around to pay additional property tax.
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they → look → tax
You've got a Government that says it's helping tackle the cost of living yet is putting bills up for people who live in inner London simply because of where they live.
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they → get → London
And Dame Emily Thornberry, Labour's MP for Islington South and Finsbury told the Mail that broadening the tax would only work as an 'interim measure'.
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broadening → tell → measure
She said: 'Council Tax bands haven't been updated for decades and in the meantime, the gap between rich and poor has got worse and worse.
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gap → say → rich
We need a proper review of council tax and the bands.
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We → need → tax
'If this is an interim measure then fine, but we must look at the system as a whole.'
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we → look → whole
Commenting on reports suggesting Mr Healey may lower the threshold, Ms Blake said: 'We know how damaging leaks can be.
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leaks → comment → threshold
It will be influencing how individuals are making decisions at the moment, and I think that that's not really in the interests of the country.'
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that → influence → country
Under current plans, homes valued between £2million and £2.5million would be forced to pay an extra £2,500 a year, with the bill rising to £3,500 for properties worth £2.5million to £3.5million, and to £5,000 for homes worth between £3.5million and £5million.
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bill → value → homes
Homes valued at more than £5million would face a £7,500 charge.
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Homes → value → charge
The levy is expected to drum up around £400million in its first year, but the Treasury estimates it will cost at least £350million to implement.
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it → expect → 350million
Shadow housing minister David Simmonds said: 'Suburban semis and bungalows are in Labour's tax snoopers' sights.
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semis → say → sights
With HMRC hammering on doors and harvesting data for their Big Brother database, families will soon wake up to find their home has been classed a 'mansion' and they've got a massive tax bill.'
Reform's treasury spokesperson Robert Jenrick labelled the move, 'another broken Labour promise', saying: 'They insisted their mansion tax would only hit homes over £2 million yet they're already talking about dragging another 150,000 families into the net.
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they → hammer → net
And the Green Party's parliamentary leader Ellie Chowns accused Labour of pursuing 'half-measures and minor tweaks which are likely to end up raising little money'.
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which → accuse → money
A Treasury spokesperson said: 'As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.'
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Chancellor → say → rumour
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