𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

Rachel Reeves has been accused of hitting Brits with a “double whammy” of taxes amid plans to introduce a property tax that could affect homeowners across the country. The Chancellor of the Exchequer confirmed earlier this week a revaluation of homes purchased for less than £2million, meaning those who have made renovations to their home or added extensions may be set to pay more tax.

The Valuation Office will “record changes to properties” such as conservatory extensions and it could see tax rates on pensioners rise exponentially. The so-called mansion tax would affect 165,000 properties worth more than £2million.

Consultation documents seen by the Daily Mail suggest further properties could be pulled into the mansion tax in the future. Reeves’ proposed mansion tax is set to come into effect from 2028.

Reeves’ proposal could see people in homes worth more than £2million pay an additional £2,500 per year. Those in homes valued at more than £2.5million could see a rise in their payment to £3,500.

Those in properties worth more than £3.5million would face a £5,000 annual bill, and properties valued at over £5million will be charged £7,500.

Tory frontbencher Gareth Bacon said: “Labour’s new family homes tax is a tax on aspiration. It’s a double whammy on top of inheritance tax. Many pensioners will be pressed into deferring the new tax surcharge in a cruel ‘pay as you die’ policy. And Labour politicians will no doubt drag more and more families into the net.”

The Office for Budget Responsibility (OBR) has warned that those who see their valuation push them into the new mansion tax bracket would likely succeed in appealing against the fresh rate. 20% of owners would appeal the result, the OBR has suggested, with 40% likely to be successful.

Ministers are also considering levying a ‘premium’ on mansions left empty. The move could see the annual charge rise by as much as 300%.

The Chancellor said during her Budget speech that the new surcharge will raise over £400million by 2031, and will be charged on less than the top 1% of properties.

The Budget document added: “Local authorities will collect this revenue on behalf of central government and will be fully compensated for the additional costs of administering this new tax. Revenue will be used to support funding for local services, with further consideration through the next spending review in 2027.

“The Government will consult on detailed implementation of the HVCTS in the new year, including to determine who might need additional support to pay the charge and how to deliver it.”