Report: Burnham Could Widen Mansion Tax to £1.5m Homes

Andy Burnham hasn't taken office yet, and he's already facing a tax fight over homes he doesn't own.

A Sunday newspaper report claims the prime-minister-in-waiting is considering lowering the threshold for Labour's planned "mansion tax" from £2 million to £1.5 million, a change that would pull more than 150,000 additional families into the levy.

What the Report Actually Claims

The change, first reported over the weekend citing unnamed sources close to Burnham, would apply to what's officially called the "high value council tax surcharge."

Under Chancellor Rachel Reeves' existing plans, due to take effect in April 2028, owners of homes worth more than £2 million face a surcharge starting at £2,500 a year, rising in bands to £7,500 for properties worth more than £5 million.

Lowering the threshold to £1.5 million would draw in a much wider band of homeowners, and the report estimates the change would raise a relatively modest £250 million a year.

It's worth noting clearly: Burnham's team has not confirmed this plan, and the claim rests on unnamed sourcing from a single newspaper rather than an official announcement.

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Why the Property Market Already Reacted

The mere prospect of a mansion tax has reportedly already reduced the number of homes for sale above £2 million, as owners hold off listing rather than risk falling into the new levy.

That shrinking pool of listings has, in turn, added pressure toward lowering the threshold further, since a narrower band of £2 million-plus homes generates less revenue than originally projected.

Reports suggest the original mansion tax plan actually started with a £1.5 million threshold before being raised, specifically over concerns it would hit Labour voters and public sector professionals in expensive areas.

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The Pushback So Far

Conservative leader Kemi Badenoch attacked the reported plan as an example of what she called Labour's "politics of envy," arguing Burnham risks repeating what she described as Sir Keir Starmer's mistakes on tax.

"Andy Burnham is making the same mistakes Keir Starmer made, putting up taxes, hitting working families, when we should be cutting spending," Badenoch said.

Separately, the Tony Blair Institute for Global Change issued what it called a "stark warning" against Burnham considering a rise in capital gains tax, arguing the country "can't tax our way to prosperity."

Burnham is understood to be weighing bringing capital gains tax on real estate, shares and investments in line with income tax rates, according to the same weekend reporting.

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The Contrast With His Business Tax Plans

The mansion tax reports land alongside Burnham's separate, already-confirmed pledge to cut business rates for pubs, music venues and independent high street shops by 20%.

That business rates cut would be funded through higher levies on warehouse operators like Amazon and on owners of empty high-street properties — a different tax lever entirely from the residential mansion tax now under scrutiny.

Together, the two positions suggest Burnham is trying to frame his early tax approach around shifting the burden toward larger commercial operators and higher-value residential property, while protecting smaller high-street businesses specifically.

TL;DR

• A Sunday newspaper report claims Burnham is considering lowering the mansion tax threshold from £2m to £1.5m.

• The change would draw more than 150,000 additional homeowners into the levy.

• Burnham's team has not confirmed the plan; the report rests on unnamed sourcing.

• Kemi Badenoch called the reported plan Labour's "politics of envy."

• The Tony Blair Institute separately warned Burnham against raising capital gains tax.

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