Burnham plots homes tax raid on middle class: Plan to lower mansion levy limit will hit more than 150,000 families with four-figure hikes

By ANNE ASHWORTH and GLEN OWEN Published: 22:00, 4 July 2026 | Updated: 22:15, 4 July 2026 Andy Burnham is set to launch a financial raid on swathes of middle–class homeowners by dragging them into the punitive 'mansion tax' regime, The Mail on Sunday can reveal. Plans to lower the threshold for the extra levy to include homes worth £1.5million would mean more than 150,000 families – particularly in the South of England – being hit with four–figure tax hikes. It could prove a double whammy for homeowners in the region, as Mr Burnham is also considering replacing council tax with a system based on land values likely to leave people living in the South paying up to three times as much as those in the North, where property is generally cheaper. Sources told this newspaper that Mr Burnham is considering lowering the threshold for Chancellor Rachel Reeves's so–called mansion tax – due to hit in April 2028 – from £2 million to £1.5 million. In parts of London, a relatively modest four–bedroomed terraced house would fall above that threshold. Tory leader Kemi Badenoch attacked the plans as another example of Labour's 'politics of envy'. It comes as the prime minister–in–waiting faces increasing pressure from backbenchers and unions to levy 'wealth taxes' on the middle classes to cover the spiralling cost of welfare and public services. Experts predict that forcing families to pay the mansion tax will raise only a relatively modest £250 million a year – but it could cause extra hardship for striving families in a cost–of–living crisis, damage a fragile property market and pave the way for greater tax raids in the future. Prime Minister-in-waiting Andy Burnham. Sources told this newspaper that Mr Burnham is considering lowering the threshold for Chancellor Rachel Reeves's so–called mansion tax – due to hit in April 2028 – from £2 million to £1.5 million Pictured: A £1.6million home in south-west London. Burnham is set to launch a financial raid on swathes of middle–class homeowners by dragging them into the punitive 'mansion tax' regime Under Ms Reeves's current plans, owners of homes worth more than £2 million will be hit with what's officially called the 'high value council tax surcharge' of at least £2,500 a year – rising in bands to £7,500 for properties worth more than £5 million. Around 180,000 properties would be affected by these plans, but Michael Bruce, CEO of estate agent Purplebricks, said: 'An estimated 150,000 additional households could be caught if the threshold falls to £1.5 million. 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.' The biggest pressure for new taxes on homes predominantly situated in the South is coming from Labour MPs in the party's former heartlands in the Midlands and North. The Unite union – historically Labour's largest financial backer – also called for Mr Burnham to introduce wealth taxes when, as widely expected, he replaces Sir Keir Starmer in No10 on July 20. General secretary Sharon Graham said: 'We must bite the bullet on a wealth tax to ensure our public services are protected... The choice should not be about whether to defend our nation or pay for schools, hospitals or roads. 'We must put workers and communities first.' Last week Mr Burnham strongly hinted that he was planning to increase taxes, saying that while he would 'stick by the manifesto promises' not to hike income tax, VAT and national insurance, there was 'some room for movement on tax'. Pictured: A £1.85million home in south-west London which could higher taxes under Burnham Tory leader Kemi Badenoch attacked the plans as another example of Labour's 'politics of envy' He vowed to cut business rates for pubs, music venues and independent high street shops, funded by higher levies on warehouse operators such as Amazon and on owners of empty high street properties. Mrs Badenoch said: 'Andy Burnham is making the same mistakes Keir Starmer made, putting up taxes, hitting working families, when we should be cutting spending. Labour can change their leader but the problem will always be the Labour Party and its politics of envy.' The spectre of the mansion tax has already hit the property market, reducing the number of homes for sale above £2 million, which in turn has ramped up the pressure for a lower threshold. It is said that original plans for a mansion tax set the threshold at £1.5 million, but it was raised amid fears that Labour voters and public sector professionals would be hit. Meanwhile, the Labour Red Wall Group of more than 40 MPs has called for council tax and stamp duty to be replaced with a flat annual levy of 0.48 per cent of a property's value– a plan Mr Burnham has previously endorsed. It would mean a property valued at £500,000 would be taxed at £2,400 a year Such a system would mean Southerners paying £1,650 a year on average, while Northerners would have bills of just £600 a year, analysis by the Daily Telegraph found. Polling by Lord Ashcroft, reported on Page 10 of today's MoS, reveals that voters regard Mr Burnham as more Left–wing than Sir Keir by a margin of nearly two to one. The comments below have not been moderated. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. 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