Would property tax spell a polling disaster for Labour?

For many months, ministers have been curiously coy about whether they would introduce a “wealth tax”.

- SEAN O'GRADY

It was previously flatly denied and was not mentioned in the manifesto. Yet more recently, from Sir Keir Starmer down, there’s been a refusal to comment. Now, perhaps, we know why: a conscious leak from the Treasury suggests Rachel Reeves is contemplating reforms to stamp duty and council tax that would amount to a new property tax. Apparently, the chancellor has briefed cabinet colleagues about the project and they are gauging public reaction. If implemented, it would be a politically brave move.

What does the chancellor want?

There are few details, but Reeves's idea seems to be to levy a new tax on homes worth more than £500,000 with, most likely, some adjustments to council tax and stamp duty at all levels of the property market. This new levy would replace stamp duty on owner-occupied primary residential homes (second and rental homes being treated differently already). A further annual local property tax would be added, based on an updated estimation of relative property values; this would replace council tax.

When does she want it?

A new national property levy could replace stamp duty in this parliament. A wholesale reform of local government finance, including a transition from council tax to local property tax and a valuation of every single home, would take years. Reportedly, that would be for Labour's hoped-for second term.

Why is it being considered?