Conservatives launch guarantee to protect the Family Home from higher tax

In yesterday's ITV Leader's Debate Keir Starmer refused to rule out increasing taxes by £2,094 – now the Conservatives are calling on the Labour Party to match the Conservatives plan to protect the family home from tax.   

Today the Conservatives are launching our new Family Home Tax Guarantee. This means a future Conservative government will protect the family home from higher tax. 

Under the new Family Home Tax Guarantee: 

• We will not increase the number of council tax bands, undertake an expensive council tax revaluation or cut council tax discounts, as Labour is currently doing in Wales.
• We will maintain Private Residence Relief so that people's homes are protected from Capital Gains Tax.
• We will not increase the rate or level of Stamp Duty to support homeowners.

This new commitment from the Conservatives follows the revelation that Rachel Reeves has previously advocated for a comprehensive council tax revaluation with the ‘revision of existing bands'.

The Welsh Labour Government is currently legislating for a council tax revaluation, with plans for higher council tax bands and cutting council tax discounts to target “property wealth”. They are developing Big Brother technology – including spies in the sky to size up gardens. This tech could then be applied to England to levy new and higher taxes on family homes.  

In 2018, Reeves also proposed that council tax should be ‘overhauled and replaced' with a ‘a property tax, levied on property owners'. This homes tax would be a totally uncapped tax on people's property. 

This would be a Family Home Tax. People's homes would receive an annual tax bill based on the current value of their house. The Family Home Tax would hammer 26 million homes in England and Wales with higher bills. 

Will Labour agree to meet our Family Homes Tax Guarantee, or are they planning new taxes on homeowners? 

Chancellor of the Exchequer, Jeremy Hunt said: 

“We know that Keir Starmer is going to raise your taxes by £2,094 but he won't tell you where that money is going to come from because he doesn't have a plan.

“Rachel Reeves has previously called for a range of damaging new taxes on the family home just like Labour are looking at doing in Labour-run Wales; and that means she and Keir Starmer are coming for your family home. 

“Only Rishi Sunak and the Conservatives will protect your family home to give you peace of mind with our guarantee that there will be no rises in such taxes for the whole of the next Parliament.”

ENDS

Notes to editors    

Labour will hike up council tax by stealth   

• Labour in Wales are undertaking a council tax revaluation. ‘As part of the work since the first consultation, we have asked the Valuation Office Agency to prepare to undertake a revaluation of properties. The Valuation Office Agency is preparing up-to-date values for all 1.5 million properties in Wales using the latest technology which is being internationally accredited by industry experts' (Welsh Government, Consultation on Fairer Council Tax: Phase 2, November 2023, link).  

• Labour in Wales are considering increasing the number of council tax bands from 9 to 12. In the third approach under consideration by the Welsh Government, Labour might look to make ‘the system more progressive. In this approach, we would: increase the number of bands from 9 to 12; add 3 new bands, 1 at the bottom and 2 at the top; redraw the new 12 bands so that the width of each band is broadly consistent across the whole structure' (ibid., link). 

• Axing council tax discounts: Welsh Labour are changing to law to allow them to abolish council tax discounts and exemptions: “We are delivering legislation which puts regular revaluation cycles for Council Tax into law, through the Local Government Finance (Wales) Bill that is currently being considered in the Senedd... We are carrying on improving other elements of Council Tax: concluding reviews of the arrangements for discounts, disregards, exemptions and premiums, to ensure these are fit-for-purpose and align with policy aims” (Welsh Government, Council tax Reform, May 2024, link). 

• Big Brother tech: The Welsh Government have instructed the Valuation Office Agency to develop an ‘Automated Valuation Model' database, built with cutting-edge tax tech from US experts, to spy on homes from a number of data sources to calculate the new higher taxes. Aerial and satellite photography and Ordnance Survey maps are being used to spy down and snoop on individual homes and gardens. (Hansard, 12 March 2024, PQ 16860, link; Hansard, 26 March 2024, PQ 19501, link; Hansard, 26 March 2024, PQ 20809, link). 

• Rachel Reeves has previously called for a council tax revaluation. ‘Council tax, based on 1991 valuations, is at the very least long overdue a re-evaluation and revision of existing bands – a power which could be devolved to local government to match local needs'. (Rachel Reeves, The Everyday Economy, 15 June 2018, p.48 and 49 link). 

Rachel Reeves called for a ‘Progressive Property Tax'   

• Rachel Reeves has suggested a ‘property tax levied on property owners' in a 2018 report. 'We should also consider the case for its (Council Tax) overhaul and replacement with a property tax, levied on property owners. It would be more equitable and it would place the burden on landlords and not tenants. It could also remove the attraction of using empty houses as investments rather than homes, put a social cost on second home ownership and rein in price volatility in the housing market' (Rachel Reeves, The Everyday Economy, 15 June 2018, p.48 and 49 link). 

• Labour have previously backed a ‘progressive property tax' levied on homeowners. A June 2019 Labour policy document called for: ‘replacing council tax with a progressive property tax… based on contemporary property values' (Labour Party, Land for the Many, June 2019, p.33, link). 

• Labour's previous policy was based on a Resolution Foundation report that called for a charge of 0.7% on properties. The report suggested ‘a slightly higher proportional tax of 0.7 per cent, boosting revenues by £12.7 billion' (Resolution Foundation, March 2018, p. 7, link). The last Labour Government introduced a similar house price tax in Northern Ireland in 2007.