Rayner, a figurehead among the party's left-wing base, had earlier this week admitted not paying enough on the flat purchase and referred herself to the government's independent ethics adviser.
“Given the findings, and the impact on my family, I have therefore decided to resign,“ Rayner wrote in a letter to Starmer, adding she would also be stepping down as housing minister and deputy leader of the Labour Party.
In his reply, Starmer told her he was “very sad” to lose her from government, but added: “You will remain a major figure in our party”.
The 45-year-old has three sons, one of whom was born prematurely and is registered blind with lifelong special needs.
She paid less of the property surcharge because she claimed it was her main home rather than a second home, but later conceded this was wrong because her son is under 18 years old.
Rayner had often been tipped to become Labour leader one day and has been a top target for political attacks by the Conservatives and right-wing media.
She grew up in Stockport on the outskirts of Manchester in northwest England, living in one of the area's most deprived social housing complexes - AFP
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