Andy Burnham is set to launch a financial raid on middle-class homeowners by dragging them into the Mansion Tax regime, it has been revealed.

The Daily Mail reports that Burnham plans to lower the threshold for the extra levy if he becomes Prime Minister.

It means homes worth £1.5million would be included, resulting in more than 150,000 families, – particularly in the South of England – being hit with four-figure tax hikes.

Mansion Tax

The UK “Mansion Tax,” officially known as the High Value Council Tax Surcharge, is scheduled to take effect in April 2028.

It will apply to residential properties in England valued above £2million, with annual charges ranging from £2,500 to £7,500 on top of existing council tax.

Sources told the newspaper that Burnahm (main picture) is considering lowering the threshold for Chancellor Rachel Reeves’ so-called Mansion Tax.

If the Government wants growth, this is the wrong place to start.”

Jeremy Leaf, north London estate agent and a former RICS residential chairman, says: “Hopefully, the penny has dropped for Labour’s likely next leader and Burnham has recognised what many others have noticed: If Mansion Tax rates are set too high, transaction numbers will be compromised. This, in turn, will have an even more damaging effect on job and social mobility – as well as the Treasury coffers.

“A Mansion Tax may be popular among the Labour Party and its supporters, but the difficulty of arranging it, as well as the inevitably long appeal process, means costs are likely to exceed what it raises, particularly as property prices have already started to drop around the new thresholds.”

Housing market activity

He added: “The impact will be greater in areas which have experienced the fastest pace of house-price growth recently, especially London and the South East, as well as on asset rich/cash poor pensioners, who perhaps bought homes many years previously.

“Builders will lose out too if a significant proportion of homeowners of properties likely to be affected refrain from carrying out improvements if this then pushes their property’s value into the higher, qualifying bracket.

“The possible change highlights another problem. Speculation about this and other property taxes is creating the very problems the Government should be trying to avoid – a reduction in housing market activity.”

If Mansion Tax rates are set too high, transaction numbers will be compromised.”

Michael Bruce, Chief Executive of estate agent Purplebricks, is reported as saying in the Daily Mail: ‘An estimated 150,000 additional households could be caught if the threshold falls to £1.5million.

“If the Government wants growth, this is the wrong place to start.

“Housing is one of the UK’s biggest economic drivers, yet the market is already fragile. Policies that discourage people from moving don’t just affect homeowners – they hit buyers, sellers, tradespeople, retailers and the wider economy.”

Meanwhile, Burnham has previously endorsed calls for Council Tax and Stamp Duty to be replaced with a flat annual levy of 0.48 per cent of a property’s value.

It would mean a property valued at £500,000 would be taxed at £2,400 a year.

Second homes, empty properties, and homes owned by overseas buyers would pay 0.96%.