Reeves ‘plots new property tax’ in Budget after income tax U-turn
Chancellor ‘mulling new property levy’ instead of income tax hike
- Chancellor Rachel Reeves is set to abandon plans to increase income tax in the upcoming Budget.
- Instead, she is reportedly expected to introduce a new levy on high-value properties, primarily affecting homes in London and the South East.
- The chancellor is also anticipated to extend the freeze on income tax thresholds for an additional two years until 2030, a move that could generate approximately £8 billion annually.
- This shift in strategy, attributed to improved forecasting, aims to plug gaps in public finances and provide greater fiscal headroom.
- The Institute for Fiscal Studies has expressed concerns that a reliance on smaller, varied taxes could be more detrimental to economic growth and signal reluctance to make politically difficult decisions.