Labour leader Ed Miliband had announced proposals to bring back the 10p lower rate of income tax which was scrapped by Gordon Brown, funded by a levy on homes worth more than £2 million.
But Mr Osborne said the Coalition Government's policy of raising the income tax threshold was a fairer way of helping the low paid and claimed Labour's "mansion tax" would end up being extended to more modest properties.
He said yesterday: "It's very costly to implement. It means you have to send inspectors round the country valuing all the homes – not just the homes worth over £2m but those worth less."
The Chancellor said there were not enough mansions to cover the cost of a tax cut for millions of people.
He added: "So either it's a tax con and the money comes from somewhere else or it's soon a homes tax and they say it's a mansion tax before the election and then very quickly (it) becomes a homes tax on many people who are not living in mansions at all."
Mr Osborne claimed that "the inspectors get their foot in the door" and then "after the election suddenly it's everyone's homes that are potentially a target and Labour will have created a new tax".
He added: "It's just another thing that proves that I don't think they understand aspiration in this country."
Shadow Treasury financial secretary Chris Leslie said: "It's laughable for George Osborne to claim his policies are fair when he's giving a huge tax cut to millionaires while forcing millions on middle and low incomes to pay more.
"Labour wants action now to kick-start our flatlining economy and help people struggling with the rising cost of living."