Angela Rayner has been accused of avoiding £40,000 in stamp duty when buying her new Brighton flat after telling tax authorities it was her main home.
The Deputy Prime Minister is understood not to have been liable for the extra payment after she removed her name from the deeds of her property in her Ashton-under-Lyne constituency before buying the £800,000 apartment in Hove, East Sussex, in May, the Telegraph reported.
Stamp duty rules mean buyers pay a surcharge if a residence is classed as a second home.
But Ms Rayner, who is also the Housing Secretary, avoided paying the full £70,000 and is thought to have paid £30,000 instead - saving £40,000, according to the newspaper's investigation.
It is also understood that she told Tameside council in Greater Manchester that the house in her constituency was still her main home, before telling Brighton and Hove town hall that her new flat was her second home, which would change council tax payments.
The designation also means she could avoid paying council tax on her second London home, a grace-and-favour apartment in Admiralty House.
Ms Rayner has not broken any laws in declaring her new flat as her primary residence.
A spokesman for the government minister said she “paid the correct duty owed on the purchase, entirely properly and in line with all relevant requirements” adding that "any suggestion otherwise is entirely without basis.”
They denied any wrongdoing but refused to confirm how much stamp duty she had paid on the Hove flat.
However, Conservative politicians have accused Ms Rayner of breaking electoral law to avoid paying council tax on the Admiralty House apartment.
The Tory party said it had initiated a legal process to remove the minister from the electoral roll in Ashton-under-Lyne, claiming she did not “meet the legal tests for living there”.
If successful, it would mean she would be unable to vote in her own constituency and she would be personally liable for the council tax bill on her grace-and-favour home.
A source close to the Minister strenuously denied the allegation and said her stake in the Ashton-under-Lyme property ended well in advance of her purchase of the Brighton home.
The new flat is liable for a second homes premium that Ms Rayner is paying in full because it is not her primary residence, they added.
MPs who stay in rented second homes for work can claim back running costs, including utility bills. But they cannot charge the taxpayer for their private homes or mortgage payments.
As a result, the over £2,000 council tax charge on Ms Rayner's Admiralty House apartment is covered by the Cabinet Office.
If she declared it her main residence, she would be liable for the bill herself.
Labour has insisted Ms Rayner "takes her responsibilities seriously and pays the council tax she owes".
