Labour is coming for Middle England’s property

A valuable asset that cannot be moved or hidden is extremely enticing to the taxman

05 October 2025 7:00am BST

Daily Telegraph 

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Making predictions is a foolish endeavour. But stating that Rachel Reeves will raise our taxes in November’s Budget appears to be a certain bet. Bond markets are already extremely jittery at current levels of government borrowing. And the Treasury’s “black hole” – the extra money that the Chancellor needs to raise to stay within her spending rules – is estimated at up to £50bn.

With Labour having had to about-turn on most of its proposed welfare cuts in the face of backbench rebellion, opportunities to reduce government spending appear very limited. Plus, it is looking increasingly likely that the two-child benefit cap will be scrapped, making pressures still greater. Tax rises are surely coming.

Labour’s 2024 manifesto pledged that it would not raise the rates of income tax, National Insurance – at least the employee contributions – and VAT. The Government will do its best to avoid flagrantly breaking these promises, although its 1.2 percentage point increase in employer NICs has arguably already breached this pledge.

Wealth taxes are thus very much on the cards.

Although Labour did rule them out in opposition, the 2024 manifesto did not do so. Very few Labour members and MPs have a principled opposition to wealth levies – indeed most would relish such a tax. At the party’s conference this week, delegates passed a non-binding motion calling for a wealth tax to fund public services.

In France, they are central to the country’s current political turmoil – with superstar economist Gabriel Zucman proposing a 2pc annual charge on all wealth over €100m (£87m). In the UK, Lord Kinnock, former Labour leader, has gone further, calling for an annual 2pc wealth tax on assets of over £10m. Tax Justice UK claims that this will raise £24bn per year from the richest 20,000 people.

The proposal may even have popular appeal – taxes that are never likely to hit most of us are regularly portrayed as a painless way of filling the Exchequer’s coffers, although they are in truth no such thing.

Much nonsense is written about the super rich, but one claim about them is valid – they are hyper mobile. Many millionaires will leave Britain if an annual wealth tax is levied.

This explains why only three European countries currently have a general net wealth tax on all assets: Norway, Spain and Switzerland. Egalitarian instincts have been central to Norway’s self-image for at least a century and Spain is ruled by arguably the most Left-wing, anti-wealth, government in Western Europe.

Switzerland is the anomaly and attracts large swathes of wealthy expatriates. But it must be remembered, although tax rates vary greatly between cantons, taxes on income in Switzerland are generally low by European standards – in some instances very modest.

The cantonal wealth taxes are also at a much lower rate than those proposed for the UK. In Geneva, which has the highest rates in the whole country and an additional municipal wealth tax, they top out for the wealthiest at around 1pc.

Some on the Left have proposed a global wealth tax imposed at the OECD level, but all attempts to introduce cross national wealth taxes have floundered.

The EU’s attempts to stop Ireland and Luxembourg from competing for global businesses by offering exceptionally low rates of corporation tax have had almost no impact. If even centralising Brussels has failed in this endeavour, the chances of an OECD-wide levy on the global plutocracy has no chance of success.

But some wealth is very much more taxable than others. Financial assets are the most difficult to corral. Art in terms of value is a concentrated asset class, with very small numbers owning truly valuable collections. But taxing it comes with challenges – valuing is extraordinarily difficult. One Rubens is not the same as another and endless disputes will swiftly arise.

In addition, taxing art wealth would almost certainly mean that many aristocratic holdings would be put up for sale, with works inevitably going to the US and the Far East – despite the best efforts of our underfunded museums and galleries.

This leaves us with property. It is an asset that cannot be moved and cannot be hidden. It is thus extremely enticing to the taxman. When France abolished its general wealth tax in 2018, it kept one on property. A tax on the value of homes may start on only the very most expensive, but it will inevitably spread to a much wider target.

The super rich almost universally have a far lower proportion of their wealth in property than the merely well off. Whilst someone with a net worth of £3m may well have property wealth of £2m, it is much rarer for someone with £30m to have £20m tied up in their domestic properties.

If a tax on property wealth is introduced in Britain, don’t expect it to take long before the inspectors snoop in suburban streets.