Reeves 'plots new property tax' after Budget U-turn

Rachel Reeves is reportedly set to bring in a new tax on high-value properties in the upcoming Budget after abandoning the plans to hike income tax.

- CAITLIN DOHERTY

The chancellor could also implement a stealth tax and freeze thresholds for another two years in the measures to be announced on 26 November, according to reports.

Ms Reeves had been expected to breach Labour's manifesto promises and increase income tax as part of her plans to plug the gap in the public finances. She had hinted as recently as Monday that keeping to the manifesto could mean “deep cuts” to public investment.

Other tax rises are still expected, but the change of heart on income tax is understood to have come after improved forecasting from the Budget watchdog, the Office for Budget Responsibility.

The Times reported yesterday that the chancellor will extend the freeze on income tax thresholds for two years until 2030, in a move that could raise some £8bn a year for the Treasury. She could also introduce a new levy on some of the most valuable homes, which would mainly affect properties in London and the South East, according to The Telegraph.