Police are investigating claims that Angela Rayner may have broken electoral law over information she gave about her living situation a decade ago.
It comes after James Daly, deputy chairman of the Conservative Party, made Greater Manchester Police (GMP) aware of neighbours contradicting Ms Rayner’s statement that her property, separate from her husband’s, was her main residence.
GMP previously said it would not be investigating the allegations, but following a complaint from Mr Daly, the police confirmed it had reassessed information and launched a probe.
The Labour Party said it remains confident Ms Rayner has complied with the rules, and the Ashton-under-Lyne MP “welcomes the chance to set out the facts with the police”.
A spokesperson for the force said: “We’re investigating whether any offences have been committed.
“This follows a reassessment of the information provided to us by Mr Daly.”
Ms Rayner has faced scrutiny about whether she paid the right amount of tax on the 2015 sale of her council house because of confusion over whether it was her principal residence.
Labour leader Sir Keir Starmer welcomed the police investigation into Ms Rayner’s council house sale and said it will allow a “line to be drawn” on the issue.
He said: “We welcome this investigation because it will allow a line to be drawn in relation to this matter.
“I am fully confident that Angela Rayner has not broken the rules. She will co-operate with the investigation as you would expect and it is really a matter for the police.”
She has rejected suggestions in a book by former Tory deputy chairman Lord Ashcroft that she failed to properly declare her main home.
The unauthorised biography alleges that she bought her former council house, in Vicarage Road in Stockport, Greater Manchester, with a 25% discount in 2007 under the right-to-buy scheme.
The former carer is said to have made a £48,500 profit when selling the house eight years later.
Government guidance says that a tenant can apply to buy their council home through the right-to-buy scheme if it is their “only or main home”.
Her husband was listed at another address in Lowndes Lane, about a mile away, which had also been bought under the right-to-buy scheme.
In the same year as her wedding, Ms Rayner is said to have re-registered the births of her two youngest children, giving her address as where her husband resided.
Ms Rayner has insisted that Vicarage Road was her “principal property” despite her husband living elsewhere at the time.
But neighbours have reportedly disputed her claim that she lived apart from her husband.
Sir Keir has previously said the Conservatives are “chasing a smear” in raising questions about the deputy leader and people were more interested in “problems caused by this Government”.
He said: “Angela Rayner has been asked no end of questions about this. She’s answered them all. She said she’s very happy to answer any further questions from the police or from any of the authorities.
“I don’t need to see the legal advice. My team has seen it.
Tax experts have estimated that, while Ms Rayner may not have owed anything in capital gains tax following the sale depending on her residency situation, there are circumstances in which she could have owed as much as £3,500 to the taxman.
The Opposition frontbencher has said she did “nothing wrong” and that the controversy about her tax affairs was “manufactured” in an attempt to smear her.
A Labour spokesperson said: “Angela welcomes the chance to set out the facts with the police.
“We remain completely confident that Angela has complied with the rules at all times and it’s now appropriate to let the police do its work.”