Conservatives force vote to stop Labour’s war on homes

The Conservatives are today [Monday 1st September 2025] demanding that Labour rule out a wave of damaging new property taxes, warning they would hammer millions of homeowners. The Conservatives are forcing a vote in Parliament on Wednesday to block Labour's latest war on homeownership by ruling out these new property taxes.

Following reports that Chancellor Rachel Reeves is considering scrapping Private Residence Relief, the long-standing protection that prevents families paying Capital Gains Tax when they sell their main home, Conservative analysis shows that removing the relief would hit families with an average £14,640 tax bill, rising to £33,000 in London and £23,000 in the South East.

This sits alongside wider property tax proposals reportedly being explored by Labour and the Treasury, including new further taxes on family homes. The Government is also considering further Inheritance Tax reform, by removing the so-called seven year gift rule which allows parents to help their children out when buying a home or putting down money for a deposit. If this was removed this help would be subject to death duties.

Taken together, these plans for new taxes amount to a war on homes that would make it harder to buy, own, or pass on a home.

Ahead of a visit to Reigate on Monday, Kemi Badenoch and Sir James Cleverly will meet with homeowners to discuss growing concerns about Labour's new tax bombshells.

After already waging a relentless war on employment through the Jobs Tax, attacking the private sector with the reckless Employment Rights Bill, and hitting farmers with their cruel Family Farm Tax, Labour is now preparing to go after families' most valuable asset: their home. These reckless policies are nothing short of a direct hit on family security, stability and aspiration.

The Conservatives are clear: we will force this vote to protect homeowners. If Labour are truly on the side of homeowners, they will vote to stop these punishing property taxes.

Kemi Badenoch MP, Leader of the Conservative Party, said:

“Rachel Reeves's tax bombshell has killed growth, opening up a £50 billion black hole in the public finances. Because of her decisions, she is now scrambling around trying to find new things to tax – it's a tax doom loop.

“Fresh from their war on private enterprise and farming, Labour look set to wage a new war on family homes with more taxes like those that Labour ministers seemingly want to avoid paying themselves.

“Conservatives don't believe you should pay capital gains if you sell your family home, nor should mums and dads be penalised for helping out their children. And if you've lived in your home for years, why should you now face a new punitive annual tax.

“Conservatives are the only party committed to living within our means so we can cut the deficit and lower taxes. So we will force a vote in Parliament to make the Government rule out these damaging property taxes once and for all.”

Sir James Cleverly MP, Shadow Secretary of State for Housing, Communities & Local Government, said:

“While Rachel Reeves is busy plotting a wave of tax rises this autumn, only the Conservatives have stood up and guaranteed that hardworking families won't be punished for Labour's economic mismanagement.

“That is why we will force a vote in Parliament. Labour must urgently rule out hitting homeowners with property taxes to pay for their reckless spending spree.”

ENDS

Notes to Editors:

• Scrapping Private Residence Relief would cost the average family in Britain 14,640 when they sell their home. Private Residence Relief means that families do not have to pay Capital Gains Tax when they sell their home. The following analysis shows that for the average family in Britain, selling their home without the Private Residence Relief would cost them an additional £14,640.

1. The average person moves home eight times in their life, therefore on average once every ten years. For that reason, the capital gains has been calculated for the past ten years (ONS,House price data: annual tables (Table 26: All Dwellings), 16 July 2025, link; Home, Press Release, 20 February 2018, link).

1.  (ONS,House price data: annual tables (Table 26: All Dwellings), 16 July 2025, link.

1. Subtraction of 2014 all dwellings house price from 2024 all dwellings house price, giving a figure for the capital gain (ONS,House price data: annual tables (Table 26: All Dwellings), 16 July 2025, link).

1. CGT liability is calculated by taking the capital gain, removing the £6,000 exemption (based upon a couple sharing the gain) and then charging CGT at 24 per cent as it is currently levied on residential property that is not a primary residence (GOV.UK,Capital Gains Tax, accessed 25 July 2025, link; ONS, House price data: annual tables (Table 26: All Dwellings), 16 July 2025, link).

• Labour is considering scrapping the Private Residence Relief on higher value properties. Rachel Reeves is considering scrapping the Private Residence Relief on properties above a certain value, the threshold for which is still under discussion. This would mean that Capital Gains Tax would have to be paid on homes above a certain threshold at a reported rate of 24 per cent for higher-rate taxpayers and 18 per cent for basic rate taxpayers (The Times, 19 August 2025, link). 

• Welsh Labour are hiking council tax bills and taxing home improvement through council tax re-evaluation and Labour's current local government minister has supported doing the same in England. In 2005, the last Labour government imposed a council tax re-evaluation on Wales and the current Welsh Labour government has legislated for another council tax re-evaluation in 2028. In 2005, four times as many homes moved up one or more council tax bands as moved down and one in three homes moved up one or more bands. The current Welsh Labour Government have also pledged to hold regular council tax revaluations: ‘Our ambition to implement more frequent revaluation cycles means... property improvements would automatically be captured regularly under such a system.' Currently, under the council tax system, home improvements (positive material changes to a dwelling) are only considered when the property is sold. But regular revaluations would have the effect of taxing the improvements in the housing stock whilst residents are still living in the property. Current Local Government Minister, Jim McMahon, has previously asserted: ‘We have seen with council tax the way that decision has been ducked for 26 years, and it is right that we make sure that it is kept up on. The principle of a revaluation ought to be supported' (Gov.Wales, Guidance, 18 February 2025, link; Hansard, 16 April 2007, Col. 4W, link; Welsh Government, Consultation on a Fairer Council Tax: phase 2, November 2023, link; Hansard, 21 February 2017, Col. 293, link).

• Labour are under pressure to introduce a land tax. The National Institute of Economic and Social Research, NIESR, have proposed introducing a land value tax. They state: ‘the Chancellor could examine the possibility of reforming Council Tax... More radically, she could consider replacing the whole Council Tax system with a Land Value Tax as suggested by Goodhart et al.'. The Labour aligned Institute for Public Policy Research has previously discussed the implications of such a tax saying that ‘On houses, there would be many losers.... A more serious problem is that LVT might become a tax on gardens, and hence on biodiversity, which is greater in suburban gardens than out on the prairie. House owners with large plots would be tempted to sell off part of their plot for a new house, and the local authority (which benefits from the increased tax take) might agree' (National Institute of Economic and Social Research, National Institute UK Economic Outlook, August 2025, p.20.; Professor Iain McLean, in IPPR, Time for land value tax, 2005, p.28-29, link).

• Labour are considering introducing a house price tax. In 2019, the Labour Party's policy document on housing called for ‘replacing council tax with a progressive property tax... based on contemporary property values'. Under the last Labour Government, under direct rule, the UK Labour Government introduced a similar system in 2007 in Northern Ireland. In Northern Ireland, under a revised system of domestic rates, householders are charged a percentage of their house price. This is known as the ‘discrete capital values' form of taxation, with an annual local council levy and Northern Ireland Executive regional levy on the capital value of each home. In August 2025, it was reported that Rachel Reeves is considering the introduction of a similar ‘proportional property tax' – to replace council tax (and possibly replace stamp duty). In 2018, Rachel Reeves advocated for this: ‘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. We should also consider the case for its overhaul and replacement with a property tax' (Labour Party, Land for the Many, June 2019, link; The Guardian, “Reeves considers replacing stamp duty with new property tax”, 18 August 2025, link; Rachel Reeves, The Everyday Economy, 15 June 2018, p.48-49).