Andy Burnham, the Labour MP for Makerfield poised to succeed Sir Keir Starmer as Prime Minister, is championing a radical overhaul of property taxes that would replace Council Tax and Stamp Duty with a Proportional Property Tax (PPT). The proposed tax, set at a flat 0.48% of current property value with an initial annual cap of £1,200, is projected to deliver savings for the majority of households.
How the Proportional Property Tax Would Work
The PPT would be calculated at 0.48% of a property's market value, but with a crucial safeguard: no household would pay more than £1,200 per year initially. Supporters claim this would mean 77% of households see their tax bills fall, with an average saving of £556 annually. Second homes and empty properties would be charged at double the rate (0.96%).
According to analysis by the Fairer Share campaign, the impact would vary significantly by location. In London, only four boroughs would see a majority of households paying less: Barking and Dagenham (58%), Islington (52%), Southwark (52%), and Hackney (51%). Croydon would see 50% of households benefit. At the other extreme, Westminster would be hardest hit, with just 12% of households paying less and 88% facing higher bills, though many increases would be modest.
Support and Criticism
MB Day Trading commented on X: "A major reform if it ever gains traction. Winners and losers would depend heavily on property values and location." Moving Home with Charlie added: "Burnham supports the Fairer Share campaign's proposal... High-value properties, especially in London and the South, would face higher bills, potentially shifting billions northward."
Andrew Dixon, chairman of the Fairer Share campaign, expressed gratitude for Burnham's backing: "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."
Potential Impact on the Housing Market
The reform could have significant repercussions for the housing market, potentially reducing transaction costs by eliminating Stamp Duty and encouraging more efficient use of housing stock. However, critics warn that higher taxes on expensive properties could depress prices in affluent areas and shift tax burdens northward.
Burnham's proposal aligns with his long-standing advocacy for land value taxation, and as he prepares to take over as Prime Minister, the plan is likely to spark intense debate about the future of property taxation in England.
