Andy Burnham has backed a plan to introduce a land value tax that could see some council tax Band D homes face annual bills of £4,791, according to new analysis. The Labour Party Prime Minister-in-waiting wants to tax homes on the value of the land they sit on at a rate of 1.28 per cent.
Potential bills of £50,000 for thousands of homes
The property tax plan could leave thousands facing bills exceeding £50,000. In London alone, 21,000 homes could face annual charges of more than £50,000, the analysis suggests. A Reform UK spokesperson said: “Nobody in Britain has voted for this. It has not been thought through and if Burnham imposes it it will simply force people who have done the right thing to pay more tax. State capacity is more stretched than ever and this would be an impractical measure, that would cost the country dearly, from a man who a few weeks ago pretended he had no interest in being PM.”
Conservative criticism
The Conservative Party Shadow Secretary of State for Housing, Communities and Local Government, James Cleverly MP, added: “First-time buyers in modest flats and families who have worked hard and saved to buy a home would all be caught by this. People cannot help the fact that house prices have risen over decades, and they should not be punished for it.”
Burnham's 'aspirational socialism'
Addressing a land tax, Mr Burnham branded it “aspirational socialism”, and called it “a very productive form of taxation” that could discourage land hoarding. In May, he said he had “long been persuaded of the argument for a Land Value Tax”, while describing council tax as “highly regressive” and its 1991 valuations as “not justifiable”.
Impact on specific areas
Tax Policy Associates’ figures assume it would replace council tax, which places homes into eight bands, from A to H. For example, in Brighton and Hove, 20,470 Band D homes currently paying £2,457 in council tax would face an estimated annual land value tax bill of £4,267. Bristol's Band D homes would see bills increase from £2,584 to an estimated £4,791.
Expert reactions
Mr Cleverly, speaking for the Tories, added: “Labour’s answer is always higher taxes.” Stuart Adam from the Institute for Fiscal Studies said: “More or less any property tax is going to be better than stamp duty.” Lucian Cook, head of residential research at Savills, said: “It is such a big change to the tax system with clear winners and losers.” Aneisha Beveridge of Hamptons warned: “They may struggle to absorb a higher annual tax bill.”
