Rachel Reeves has been challenged (Image: Getty)
The Conservatives have warned that families are facing a ￡15,000 tax bill as Rachel Reeves mulls a new property sales tax ahead of the Budget. This week, reports emerged that the Chancellor is considering replacing Stamp Duty with a new levy when the property is sold, sparking warnings that she is now coming for “the family home”.
Shadow Chancellor Mel Stride has now demanded Ms Reeves “come clean” about her plans, and challenged her to rule out removing Private Residence Relief, which exempts homeowners from Capital Gains Tax when selling their primary residence. Conservative analysis claims removing this relief would impose a huge ￡14,640 on the cost of selling a house, which the party has branded Labour’s “Family Homes Tax”. In more expensive areas, this sum could rise past ￡30,000, acting as a major disincentive to selling and slowing down the housing market.
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Rachel Reeves warned new tax 'could ruin plans for pensioners'
Rachel Reeves 'daft new IHT plot' slammed for 'turning grandparents into tax evaders'
Government forced to deny new ￡500k property tax decision amid fears of raid on homeowners
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Rachel Reeves is scrambling to find billions in new tax rises (Image: Getty)
Mr Stride demanded: “Labour need to come clean about whether taxing the family home is next on their list. We know Rachel Reeves is putting together her plans for tax rises in the autumn.
“The Conservatives made a family home tax guarantee in our manifesto - Labour did not. Families need certainty and Labour need to rule out balancing the books on the backs of homeowners.”
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Experts claim Ms Reeves is having to find nearly ￡50 billion in new tax hikes and spending cuts in order to meet her self-imposed fiscal rules at this October.
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The Guardian reported on Monday that Ms Reeves may replace Stamp Duty with a new similar system, which it claims would raise the same amount of revenue but affect fewer buyers.
The national property tax would be paid by owner-occupiers on houses worth more than ￡500,000, directly collected by HMRC, while stamp duty would remain for purchases of second homes.
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Read more: Rachel Reeves' rumoured plans to replace Stamp Duty 'will push house prices up'
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Mel Stride's branded it a 'family homes tax' (Image: Getty)
TV property presenter and housing expert Kirstie Allsopp also weighed in yesterday, slamming what she claimed was a deliberate leak by the Treasury to see how the policy would go down with voters ahead of any changes.
Ms Allsopp said the Treasury was “flying kites” to determine public reactions, which will have a “destabilising effect” on the property market.
She told Times Radio: “Don't fly kites like this. It is really destabilising for the property market. And when I say the property market, I mean people's homes and their mortgages and homes affect their relationships, their jobs, their education, their wellbeing in almost every way you can think of. It's not the place to fly kites.”
“This government seems to want to punish people for making the sacrifices they've made to buy their own homes.
“The average move used to be five in a lifetime, and it's now four. And as you know, people don't downsize because it's become too expensive.”
Yesterday Pensions Minister Torsten Bell was also accused of planning a new raid on private pensions this autumn, squirming as he insisted the allegations were “nonsense”.
Kirstie Allsopp also slammed the proposals (Image: Getty)
At the last Budget, Rachel Reeves changed rules so pension pots are no longer exempt from inheritance tax of 40%, including if the individual dies before they turn 55 and haven’t yet accessed their pension savings.
Mr Bell accused his interviewer of “talking nonsense”.
“If you want to have properly funded public services [it needs to be money]. We put a lot of pension tax relief in to make sure people have strong incentives to save for their retirement.
"What it’s not there to do is to encourage financial advisors to market pensions as a way of avoiding inheritance tax.”
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A Treasury spokesman said: “We continue to incentivise pensions savings for their intended purpose – of funding retirement instead of them being openly used as a vehicle to transfer wealth – and more than 90% of estates each year will continue to pay no inheritance tax after these and other changes.”
They added on the Tories’ house tax allegations: “As set out in the Plan for Change, the best way to strengthen public finances is by growing the economy – which is our focus. 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.
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