Labour planning secret tax on ‘nice houses’

Millions of middle-class home owners living in desirable neighbourhoods are facing higher council tax bills after the next election following a secret Government exercise to assess the “niceness” of different areas.

Tax inspectors have divided England into 10,000 new “localities” with each neighbourhood ranked on the socio-economic class of its residents and environmental factors such as crime and traffic levels.

The inspectors have even purchased demographic data disclosing how many company executives, pensioners or students live in particular streets, The Daily Telegraph has learned.

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This has been collated on a secret database which is being used to assess the desirability of neighbourhoods to help determine council tax bills if Labour wins power again at the next election.

The Conservatives have branded the proposal “a nice neighbourhood tax” which will penalise middle class families struggling to cope with the economic downturn. It is feared the revaluation will quickly be implemented if Labour wins the next election to help fund the growing deficit in Britain’s public finances.

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A revaluation of council tax bills is considered politically explosive and has already been delayed once amid widespread fears that it would be used to increase taxes.