FEARS are growing that Rachel Reeves could slap a new tax on people’s homes to replace stamp duty and council tax.
The Chancellor is studying plans for a levy on houses worth over £500,000, according to The Guardian.
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The paper said the Treasury is looking at a “proportional property tax” which would be paid when owners sell their homes.
It claimed the shake-up could also pave the way for a new local levy to replace council tax, which is still based on 1990s property values.
But Treasury officials last night insisted that while tax reform is being explored, the details – including any threshold or rate – have not been decided.
A Treasury spokesperson said: “The best way to strengthen public finances is by growing the economy – which is our focus.
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“Changes to tax and spend policy are not the only ways of doing this, as seen with our planning reforms, which are expected to grow the economy by £6.8bn and cut borrowing by £3.4bn.
“We are committed to keeping taxes for working people as low as possible, which is why at last Autumn’s Budget, we protected working people’s payslips and kept our promise not to raise the basic, higher or additional rates of Income Tax, employee National Insurance, or VAT.”
The Sun reported yesterday that homeowners would be forced to hand over £82,000 to the taxman thanks to Reeves’ inheritance tax raid.
Inheritance tax is charged on all assets above the £325,000 threshold, which is called the nil-rate band.
Anything above this threshold is charged at 40%, but your tax-free allowance rises by £175,000 if you leave your home to a direct descendant, such as a son, daughter or grandchild.
Currently, pension pots are exempt from inheritance tax – but this will all change from April 2027, when they will suddenly be subject to the 40% levy, following a tax grab announced in last year’s October Budget.
The change is expected to increase the number of estates paying death duties from 4% to 9.7%, dragging thousands of people into the tax net.
New analysis by Quilter shows that grieving families could face a nasty bill sting following the changes.