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 (6)
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?