Number 10 is considering plans to implement a mansion tax in next month’s budget to help pay for spending increases.
Plans to hit wealthy homeowners with the tax have been discussed at the Treasury and Number 10 multiple times, according to the Sunday Telegraph.
The new tax would disproportionately hit London and the South East and help pay for the Conservatives’ election pledge to spend £100bn on infrastructure, most of it located in the Midlands and the North.
However, the form in which the tax would take is not clear.
One option is a straight levy, similar to what former Labour leader Ed Miliband proposed in 2013, while another would be to modify council tax rates for properties over a certain value.
Chancellor Sajid Javid is reportedly mulling over several other forms of new taxation on high earners, such as a recurring tax on wealth.
The Financial Times also reports that Javid and Boris Johnson are considering cutting pension tax relief for those earning more than £50,000-a-year from 40 per cent to 20 per cent, which would raise an estimated £10bn.
The taxation measures will be seen as a way to appeal to newly won northern and Midlands voters in December’s General Election.
The Tories’ 80-seat majority came after it broke Labour’s so-called “red wall” and picked up many traditional Labour constituencies.
Johnson has consistently said he would spend big on transport and the health service to support these areas.
However, Taxpayers’ Alliance chief executive John O’Connell told the Sunday Telegraph that wealth taxes would not necessarily be appealing to these newly won voters.
“They may be new converts to the message, but they still expect the Conservatives to be the ones backing them when they succeed,” he said.
“Levelling up doesn’t mean cutting other people down.”