Several reports over the weekend focused on the housing policies that could be pursued by Andy Burnham if he becomes prime minister, including claims that he supports replacing council tax and stamp duty with a new annual property levy.
While no formal policy has been announced, reports suggest Burnham backs the proportional property tax (PPT) proposed by the Fairer Share campaign. The scheme would replace both council tax and stamp duty with an annual levy based on 0.48% of a property’s value, rising to 0.96% for second homes, empty properties and homes owned by overseas buyers.
The proposal has already prompted debate across the property sector over who would benefit and who would pay more.
Analysis published by the Fairer Share campaign suggests the impact would vary significantly by location. In London, a majority of households would pay less in just four boroughs: Barking and Dagenham (58%), Islington (52%), Southwark (52%) and Hackney (51%), while half of households in Croydon would also see lower bills.
At the other end of the scale, Westminster would be the hardest-hit borough. The campaign estimates that only 12% of households would pay less, with the remaining 88% facing higher property taxes, although many would see relatively modest increases.
The proposal would place liability on property owners rather than tenants, meaning renters would not pay the tax directly. However, there is concern that landlords could seek to recover some or all of the additional cost through higher rents.
According to reports, any increase in property tax would initially be capped at £1,200 a year for existing homeowners. The cap would fall away once a property is sold, after which the full annual charge would apply under the proposed system.
“We’re very grateful for Andy’s (Burnham) support,” said the Fairer Share campaign’s chairman Andrew Dixon
“He’s been for a long time now a passionate believer in land value tax and in many ways this is a de facto land value tax, very progressive, ensures that there’s a flat rate for everyone up and down the country, and also ensures that those with the broadest shoulders pay their fair share,” he added.
The campaign estimates that the owner of a £700,000 property would pay £3,360 in PPT and that is around the same level of council tax for a property of that value.
Comments (16)
This sounds like the old rates system – I remember renting and when the poll tax was introduced asked for a rent reduction and got it as I rather than the landlord was then paying the charge. So it’s perfectly reasonable for tenants to have this cost added to the rent as they will no longer be paying council tax.
These people are a joke and its just tax upon tax at the moment.
If these idiots had some sense and used tbe public purse effectively there would be no need to keep driving up taxes.
Also.th3se clowns are incapable of sticking to any budget!! Look at the over spend on HS2!
Labour will cry that its down to the tories, but labour has been in.power for 3 years now! I would not be suprised if these clowns are taking the over spend for their own gains.
Also we need an election after the xoup carried out by labour on their own leader!
This man has manipulated democracy to put himself in a position of power so he can hammer those who have worked to achieve some degree of comfort and donate their hard earned money to the lazy and workshy and of course anyone who hops off a rubber dinghi. He has no right to even be an mp never mind the pm. But the labour party will do anything, and I men anything to stay in power and punish the real working class.
The poll tax, community charge, council tax were all rightly condemned for hammering pensioners who were (mostly modestly) asset rich but cash poor. This will hammer them even harder, forcing them to sell up and, in many cases move from an area they have loved in for decades.
The ‘Fairer Share Campaign’ . Fairer to whom exactly. It’s just yet another example of ‘you’ve worked hard and saved for it, we didn’t, so now we want to take it from you’.
Hopefully this will not happen. Has Burnham, or any others toying with this daft notion really thought this through? A “Band E” property currently valued at £775K in Westminster would see its council tax, rise from approx £1,100.00 p.a. to £3,720.00 p.a. I cannot understand the argument for, in some cases, tripling the council tax, particularly in a borough that is not currently in the red! As Rosebush and BillyTheFish quite correctly state how can a council not only levy a charge based on what someone might pay for a property but that the person responsible may not even be the beneficiary of those council’s services. A property is only worth what someone is prepared to pay for it. Additionally in areas where property prices command a higher value and where the occupants are in receipt of benefits then those councils will have to cough up for all those people as well. Surely, the council tax levied is the annual cost estimated by the council divided appropriately by the number of the borough’s citizens. Westminster is densely populated and has generally been well run over the decades so perhaps that’s why its costs are currently relatively low. I appreciate that anyone who’s reading this, and is set to gain from these proposals, won’t be very sympathetic to my comments but an expensive property does not necessarily mean that the occupant has an unlimited disposal income. Means testing for council tax, perhaps? Or even the square footage of the property universally applied nationwide would be better than trying, and failing, to guess what someone thinks a property is worth. I could go on but it doesn’t matter who you vote for, the government always get in!
Where do get a figure of £1,100 a year for a band E in Westminster? I live in a band D and pay£2,500.
[link removed]
Try this link but it’s showing £1,240.81 p.a. and that’s without the 25% discount if you live on your own. I hope the link works, Selina
Don’t you think that £1100 is an exceptionally low amount for a property of that value?
I pay more than that for my Band B flat in Southampton, bought for just over £200000, and that’s also with the 25% discount. Council tax rates are similar in Southampton to the national average.
It turns out that Westminster has one of the lowest council tax rates in the country, and this is because the council generates an exceptionally large income from business rates, effectively subsidising the residential taxes.
Fair enough, but it isn’t reasonable to use what is in fact an anomaly as evidence in an argument against the proposal to change how local services are funded.
Again, more questions than owners…
1. We currently pay £1440 p.a (Band A, 19991 valuation even though the property was built in 2022). This would go DOWN to £864 AND no stamp duty to pay when we move.
2. As mentioned, who will ‘value’ the 27.1 million properties. And (being a valuer) we all know that there is NO VALUE for a property. It is worth what someone is willing to pay AND what the surveyor says (mostly based on the buyers position, how much deposit etc)
3. SDLT generated 20 BILLION pounds in 25/26. To lose this, you have to generate this through the new levy and if we use the figure of 20 million homes, it would mean everyone has to pay £1000 more
4. Again, as mentioned, why does someone not living in the area (a landlord) pay for services they don’t use?
We definitely need a better system than council tax (no actually, just people in power not in for themselves). There is a council tax band ‘value up to £40,000’. In fact, in one area alone, the maximum ‘value’ is £320,000. Having just sold one for £920,000, the maximum value is way out. Then you have the argument that more people in a household use more services, so should it be based on an individual tax? Noting to do with house value, or number of windows, or how many times you ate egg this week!
JC
Looks like Burnham is carrying on where Starmer left off. Now only home owners will pay for local services. I also read recently that there will be a ban on landlords’ increasing rent to cover this so called land charge. Labour have lost track of exactly what council tax is all about. Why should it only be the responsibility of home owners to pay for the police, fire service, schools and all local services. Why land tax? Thousands of flats rented out or purchased don’t own any land especially those above shops. Labour not only hate landlords but it now transpires they also hate anyone who also owns their own home. They tried this before in the 60/70’s when they announced they would nationalise all land. It cost them many of their followers.
If tenants are using the local services then why on earth would the landlord pay council tax? It would be the same as utilities being included in the rent.
This man is extremely poisonous – somehow indicated setting UK right over 10 years. Personally would not give him 10 mins to ruin the UK let alone the Property Industry.
You could apply that to pretty much all MPs currently.
Very few are trustworthy, many with their own agendas at any cost. Just look at the guy who led Brexit and the following 6% loss to our economy. The same guy who backed Trump in Iran. If he gets in next it will be austerity on steriods, and blaming immigrants more and more for everything that is still going wrong – if you have any non-white DNA in your family beware of this policy.
I don’t know much about Burnham but he seems to have done a good job as Mayor.
I think everyone agrees stamp duty is archaic and discourages moving home. I think most people agree the uk tax system needs an overhaul also. Housing would be a good place to start as right now things do not look great thanks to austerity, Brexit and Trump/Iran, it needs stimulating.
Another brilliant idea from a ;think tank! Just who is going to value ca 30 million dwellings – as well as coping with the inevitable wave of appeals (values moving up and down – particularly the latter at present)? If capped at £1,200pa until a property is sold, what incentive is there to sell?
Surely a window tax would be an easier solution – and take us back to the 17th century, which is where our economy belongs…..
If only home owners are paying and not renters or council tenants the tax will be huge for each private property to make up the shortfall. When will landlord bashing end?