In a significant development today, Housing Secretary Steve Reed avoided dismissing the possibility of a ‘mansion tax,’ signaling that Labour may be considering measures targeting affluent homeowners.

Reports have surfaced indicating that Chancellor Rachel Reeves is contemplating a substantial levy on properties valued over £2 million, potentially to be introduced in next month’s Budget.

According to details shared by the Mail on Sunday, this proposal would impose a 1% charge on the amount by which a property’s value exceeds the £2 million threshold.

For instance, owners of a property valued at £3 million might find themselves facing an annual tax bill of £10,000.

However, the proposed tax has faced significant backlash from property industry experts and even a former Bank of England governor.

In an interview with LBC radio Monday morning, Mr. Reed notably sidestepped questions about his stance on the ‘mansion tax,’ leaving his position on the matter unclear.

He refused on four occasions to rule out such a tax being levied by Ms Reeves, when she reveals her next fiscal package on 26 November.

It came as the Chancellor confirmed she’s looking at tax and spending as she attempts to plug a multi-billion pound hole in the public finances.

Housing Secretary Steve Reed repeatedly refused to rule out a ‘mansion tax’ in a fresh sign Labour has a ‘class war’ plan to hammer wealthy homeowners

Asked if he would be in support of a mansion tax on those with homes worth more than £2million, Mr Reed said: ‘Well, I’ve seen some of the speculation about this and it’s never a good idea for a minister to come in and speculate.’

Pressed on whether he would support such a levy in principle, the Housing Secretary added: ‘You are asking me to speculate, given that we’ve got the Budget coming up soon.’

Challenged for a third time as to whether he would be in favour of such a move, he replied: ‘It’s best for me not to answer that question. 

‘With the Budget coming up and the speculation that’s around, it will sound like I’m giving the Chancellor advice on what she should or shouldn’t do, and that’s never a good idea for a minister.

‘We need to wait and see. It’s only a few weeks until we get the Budget so we’ll see then what decision she’s taken.’

Asked for a fourth time about a potential mansion tax, Mr Reed said: ‘We do need to wait and see.

‘The Chancellor will be announcing her whole tax strategy and all the tax reforms coming forward in the Budget.

‘It’s never a good idea for a minister to speculate. I don’t know, actually, what’s in the Budget so far.’

He added: ‘We do need to make sure that we have a system in this country that is fair, that is proportionate and that brings in the investment we need to get our economy moving again and our public services functioning.’ 

Former Bank of England governor Mervyn King yesterday lashed out at proposals for a mansion tax.

The peer, who ran the Bank between 2003 and 2013, told Sky News the UK needed more than plans ‘written on the back of a fag packet’.

‘That is not a coherent tax strategy and you could do a great deal by thinking it through first,’ he said.

‘Property taxes are an interaction between stamp duty, council tax, capital gains tax, inheritance tax.

‘You don’t solve that problem by just adding another wealth tax to it.’

It was this weekend revealed how Chancellor Rachel Reeves could hit those with homes worth more than £2million with a punitive levy in the Budget next month 

TV property guru Kirstie Allsopp lambasted the proposal, branding it a ‘fantasy’ that would not work because there is no way of valuing property in such a ‘fragile’ market.

She told the Daily Mail: ‘At the moment, there is no efficient way of valuing anything because the market is in such a fragile state, so this is fantasy.

‘Someone needs to tell Rachel Reeves to stop talking about homes – they are not little piggy banks for the Government.’

Tory shadow chancellor Mel Stride said: ‘Keir Starmer and Rachel Reeves promised not to raise taxes, now we know they are planning to do just that.

‘If Starmer and Reeves introduce a so-called mansion tax, they will be punishing aspiration and hitting hard-working people. This isn’t fairness, it’s class war.

‘If Rachel Reeves had a backbone, she’d get a grip of spending – including the welfare bill – instead of raising taxes again and chasing out the very wealth creators our economy depends on.

‘Under Labour, nothing is safe – not your job, your home, your savings or your pension. Rachel Reeves will tax your children’s future to pay for her failure.’

Amid the backlash, the Chancellor spoke in Riyadh on Monday morning after she jetted to Saudi Arabia to push through a trade deal with countries in the Gulf Co-operation Council.

Answering questions at Fortune Magazine’s global forum in the Saudi capital, Ms Reeves confirmed she was looking at tax changes ahead of the Budget. 

The Chancellor said the Government needed to ensure there is ‘sufficient headroom’ above its spending plans when she reveals her next fiscal package on 26 November.

Asked if she was considering tax rises in the Budget, Ms Reeves replied: ‘The underpinning for economic growth is stability and I’m not going to break the fiscal rules that we’ve set.

‘We are going to reduce that primary deficit, we are going to see debt starting to fall as a share of GDP, because we need more sustainable public finances, especially in the uncertain world in which we live today.

‘So, growth will be a big part of that Budget story, in a way that, frankly, I think growth has been neglected as a tool of fiscal policy in the last few years.

‘We are looking, of course, at tax and spending to ensure that we both have resilience against future shocks by ensuring we’ve got sufficient headroom, and also just ensuring that those fiscal rules are adhered to.’

The Chancellor acknowledged she arrived ‘a little bit late’ for her event at the Fortune conference, telling the audience it was a result of ‘really good meetings’ about the GCC deal.

Ms Reeves said she hoped conference attendees ‘will agree that’s worth it, if we can get that GCC deal over the line’, and later added: ‘And yes, I am confident that we can get that deal over the line.’

Asked if she was considering higher taxes on the wealthy at the Budget, Ms Reeves insisted that ‘there is another way to improve the fiscal position: growing the economy’.

But she also defended the Government’s approach to the very rich, when asked about why some were leaving the UK for other countries.

‘Everybody knows that countries around the world are having to spend more on defence that we need to rebuild our public finances and our public services, and everyone who makes Britain their home should contribute to that,’ the Chancellor said.

She added: ‘We don’t want to drive anyone out of the UK, but we do want to make sure that we tax people fairly, people who make Britain their home, whichever country they or their parents are originally from.’

Ms Reeves last week refused to rule out an income tax rise at the Budget.

Asked about reports that the Treasury is in active discussions over raising the rate, the Chancellor said on Friday she would ‘continue to support working people by keeping their taxes as low as possible’.

She added she was still ‘going through the process’ of writing her Budget.

The IFS think-tank has warned Ms Reeves has a £22billion black hole to fill at her Budget.

But it suggested the Chancellor might want to drum up an extra £20billion to ensure she does not have to come back yet again for more cash.

Other economists have calculated that the Government could have an even bigger gulf of £50billion in the public finances.