LONDON – Rachel Reeves faced a furious backlash yesterday, over a possible and highly controversial shake-up of property levies.
The chancellor was warned that proposals to replace stamp duty with an annual charge on homes worth more than £500 000 would damage the market as well as punish people who have worked hard to own their houses.
One of her Treasury ministers refused to rule out the possibility of her introducing the radical change in the budget as she seeks to fill a £50 billion black hole in the public finances.
Labour vowed before the last election that it would ‘not increase taxes on working people’, ruling out rises in National Insurance, income tax or VAT.
That language seemed to soften though, yesterday. Shadow Chancellor Sir Mel Stride said: ‘‘Labour can equivocate all they like, but we know they are drawing up plans to raise taxes yet again at the Autumn Budget.’’
‘‘Keir Starmer and Rachel Reeves promised not to raise taxes on working people, then introduced a £25 billion Jobs Tax – which will leave the average working household £3 500 worse off.
‘‘Now, after their botched welfare reforms and economic mismanagement, they are clearly gearing up to do it all over again this autumn.
‘‘The British public simply cannot afford Labour. Only the Conservatives believe in sound money and low taxes.’’
As part of her efforts to fill the government’s coffers and boost economic growth, Reeves is understood to have asked officials to look at a potential overhaul of property taxes.
She has already been called on by economists to scrap the current system in which buyers having to pay thousands of pounds in stamp duty on house sales, which they say deters people from moving.
The Guardian reported that owners of houses worth more than £500 000 could have to pay a ‘proportional property tax’ based on the value of their properties when they sell up.
However, sources played down the claims that Treasury officials are looking at this proposal or threshold.
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