The Rest Is Money 226. Will Labour’s Mansion Tax Backfire?
Nov 20, 2025
The hosts tackle the potential consequences of the new mansion tax, discussing its impact on the housing market and long-term homeowners. They highlight the challenges of revaluing properties and the political risks for Labour’s young supporters. The conversation shifts to the implications of proposed salary sacrifice pension changes and how they might discourage savings. Finally, they explore the logistics and fairness concerns around a mileage tax for electric vehicles, weighing the pros and cons of replacing traditional fuel duties.
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High-Value Homes As A Wealth Proxy
- Labour plans to target high-value homes as a proxy for a wealth tax via council tax rebanding or a mansion-style annual levy.
- Technical and political pitfalls risk missing many expensive homes or hitting cash-poor owners with high bills.
Deferred Payment Could Avoid Forced Sales
- A 1% annual levy on values above £2m could create large cash demands for owners who lack liquid assets.
- Robert suggests deferring payment until sale or death to avoid forcing forced sales and hardship.
Coordinate Council Tax Changes With Settlements
- If the government uses council tax uplifts, it must adjust the funding settlement with councils to reclaim revenue for the Treasury.
- Policymakers should coordinate allocations to avoid unexpected losses or windfalls for local authorities.