A Labour MP has warned Chancellor John Healey against lowering the mansion tax threshold from £2 million to £1.5 million, citing concerns that it would unfairly target family homes rather than ultra-wealthy properties. Rachel Blake, a former Treasury minister, expressed alarm that such a reduction would double the number of properties affected to 272,000, with nearly 80 per cent concentrated in London and the South East. The warning reflects growing internal Labour concern that the proposal contradicts the Government's stated commitment to easing the cost of living.

The analysis shows that lowering the threshold would catch one in four detached homes in London, including many terraced and semi-detached houses purchased decades ago before property prices escalated. Under the current £2 million threshold, homes valued between £2 million and £2.5 million would pay an extra £2,500 annually, rising to £7,500 for properties over £5 million, with the levy expected to generate approximately £400 million in its first year. Other senior Labour figures, including Dame Emily Thornberry, have suggested any threshold reduction should only be temporary, pending a comprehensive review of the outdated council tax system.