The government is considering replacing council tax and stamp duty with a new 0.48% annual charge on homes, according to reports. The move follows former Housing Secretary Steve Reed's confirmation that the Labour Party is exploring alternative options to the current property taxes.
Prime Minister's stance
Andy Burnham, who became Prime Minister on July 20, 2026, has pledged to cut business tax for pubs, clubs and music venues and reduce VAT on electricity bills. He has described council tax as “highly regressive” and said he has “long been persuaded of the argument” to change the system.
Options under consideration
According to The i Paper, two options are being examined: a proportional property tax that would replace council tax and stamp duty with a 0.48% annual charge on a property’s current value, or a land value tax based on the value of the land rather than the building. More than 100 MPs from the Labour MPs for Council Tax Reform caucus, the Red Wall group, and the All-Party Parliamentary Group (APPG) on Council Tax Reform are calling for an overhaul.
Criticism of current system
Hartlepool MP and APPG chair Jonathan Brash slammed council tax as “one of the most unfair taxes in Britain”, noting that a comparable property in Wandsworth would cost £1,020 a year while in Hartlepool it would be £2,556. Stamp duty is currently paid on purchases over £125,000, rising to £300,000 for first-time buyers.
Challenges ahead
Any reform is likely to take time. Lord Blunkett said a land value tax would be “politically problematic” and that “radical thinking in economics” is necessary before any considerations. Mr Burnham was handed a policy document detailing the case for reform in his first days in office.
