Kirstie Allsopp warns Labour’s tax shake up could punish hardworking homeowners

Rachel Reeves’ possible property tax shake up has sparked a furious backlash, with property expert Kirstie Allsopp accusing Labour of planning to “punish” ordinary people who’ve worked hard to buy their homes.

The row erupted after reports that Labour is looking at scrapping both Stamp Duty and council tax in favour of a new system designed to bring in more money. Reeves is said to be considering a proportional property tax for homes worth more than £500,000, alongside a new local property tax to replace council tax, based on proposals by former government adviser Tim Leunig, reported the Express.

But Allsopp has hit back, warning the move would destabilise not just the housing market but family life. Speaking to Times Radio, she said: “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.”

She argued the plans amount to punishing people for making sacrifices to get on the ladder. “It feels like the Government wants to punish people for making the sacrifices they’ve made to buy their own homes,” she said.

The proposals, according to reports, would see owner occupiers pay a proportional tax on properties valued at over £500,000 when they sell. The rates would be set by the Government and collected through HM Revenue and Customs. Currently, buyers alone pay stamp duty, at a rate of 5 percent on homes priced between £250,001 and £925,000.

The leaked report also suggested replacing council tax with an annual property levy set at 0.44 percent for homes worth between £500,000 and £800,000.

Allsopp said this endless tinkering with tax policy is a major reason why the housing market is stuck. “We keep on having these conversations about inequality, which does involve money that’s in property,” she said. “The Tories did this just the same. They’ve used stamp duty over the years to get money out of the system. And as a result, you know, lots of other things have caused price inflation, but stamp duty is a big part of it. And people now don’t move.”

The Treasury has tried to calm nerves, insisting its focus is on growing the economy, not squeezing homeowners. In a statement, it said: “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. We are committed to keeping taxes for working people as low as possible.”

Tax reform is expected to be front and centre of the Autumn Budget as Reeves wrestles with a multi-billion-pound black hole in the nation’s finances. But Leunig himself admitted to the FT that it would be difficult for Reeves to push through such sweeping reforms so quickly. “She needs money upfront, and she has fiscal rules to meet,” he said.