London families will be hit hardest by property tax plan, claims campaigner

Rachel Reeves's plan for a new property tax on homes worth more than £500,000 has been criticised as a “tax on ordinary Londoners” that will hit families hardest.

- ARCHIE MITCHELL

The chancellor is considering a shakeup that will see the introduction of a new levy that would be paid by homeowners on properties worth more than £500,000 when they sell them. The amount paid would be determined by a property's value.

The levy would replace the current stamp duty regime for first homes, which sees buyers pay a tax on the value of properties over £125,000, or £300,000 for first-time buyers.

But Simon Gerrard, an estate agent who has long campaigned to reform stamp duty, warned it would amount to a “London tax”.

Speaking to The Independent, Mr Gerrard, chair of Martyn Gerrard Estate Agents, said: “Rightmove’s latest figures for August show that the average price of a property in London is now £666,983. Upping taxes for properties over £500K is not making the wealthy pay their fair share, it’s a tax on ordinary Londoners.

“It’s already nearly impossible for normal people to start a family in London as it is. This London tax will only make it harder.”

He said the threshold for the potential tax change should be significantly higher than £500,000 in London, or Labour would fail in its mission to support working people.

He also warned that the potential tax change could distort the property market for homes worth around £500,000. Mr Gerrard said: “You're going to see a ceiling at the £500,000 threshold for that band of the market, as people avoid falling under the regime, and then a significant jump in values with nothing in between.