Mansion tax will not extend to 1.5 million pound homes, Healey decides
The Chancellor has rejected proposals to lower the mansion tax threshold from 2 million pounds to 1.5 million in his first Budget, The Times reported, sparing some 130,000 properties from the levy.
Homes worth 1.5 million pounds will not be caught in Labour's mansion tax after John Healey rejected proposals to lower the threshold in his Budget this month, The Times reported.
The Chancellor is understood to believe that changing the rules before the surcharge begins in April 2028 would risk undermining public support for the reform. The Treasury has gone cold on the proposal, according to the paper's account of the Budget preparations.
The decision will be welcome news to the owners of roughly 130,000 properties that risked being dragged into paying higher tax had the threshold been dropped.
The threshold stays at 2 million pounds: some 130,000 homes stay outside a levy that has not yet begun.Daily Herald
Last year Rachel Reeves, the former chancellor, announced that homes in England valued at 2 million pounds and above would have to pay more in tax. The annual charge, which comes on top of council tax, ranges from 2,500 pounds for homes worth 2 million to 2.5 million pounds up to 7,500 pounds for those worth 5 million pounds or more.
There had been speculation that Mr Healey was considering reducing the threshold as he looks to raise money in his first Budget on 28 October. Lowering it to 1.5 million pounds would have resulted in the number of homes hit by the mansion tax jumping from 134,000 to 271,000 based on current values. A Reuters factbox on the Chancellor's options, published on 7 October, likewise reported that extending the levy to properties worth more than 1.5 million pounds would more than double the number of homes subject to it to about 271,000.
The same Reuters factbox said Mr Healey is expected to raise taxes in his first Budget to restore some of his fiscal room for manoeuvre, which has been eroded by the global surge in borrowing costs caused by the Iran war, and that he and Prime Minister Andy Burnham have promised to help reduce the cost of living for voters.
Kemi Badenoch, the Conservative leader, has positioned her party as the champion of home ownership in announcements at the Tory conference. Mrs Badenoch has promised to take the family home out of inheritance tax entirely, vowed to scrap Labour's mansion tax and recommitted her party to abolishing stamp duty on primary residences if it won office, The Times reported.
Tax rises are widely expected in the Budget. Banking bosses are braced for a tax increase of some form, with a rise in the banking surcharge one possible route, while the Treasury is understood not to favour a new raid on oil and gas profits, according to The Times.
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