Prime Ministerial candidate Andy Burnham has signalled his intention to replace council tax with a Land Value Tax (LVT), prompting a warning from wealth management experts that high-value properties in London could face significant cost increases.
Burnham's Leadership Platform Includes Property Tax Overhaul
Burnham, the leading candidate to succeed Sir Keir Starmer as Labour leader and prime minister, has proposed a 10-year plan that includes sweeping changes to the tax system. Among the most contentious is the replacement of council tax and stamp duty with an annual charge based on land value rather than property value.
Rebecca Williams, Financial Planning Divisional Lead at Rathbones, said: 'Andy Burnham, the leading candidate to be the next prime minister, has signalled a different direction on tax, property, and public spending. Nothing is confirmed. His past comments don’t guarantee future policy, but they give an indication of what could change if he does become prime minister.'
How Land Value Tax Would Work
Under an LVT system, homeowners would pay an annual charge based on the value of the land their property occupies, not the building itself. Williams explained: 'Burnham has said that land is under-taxed, and that he would advocate for a land value tax to replace stamp duty and council tax.'
She added: 'If introduced, it could increase ongoing costs for owners of high‑value properties or properties occupying a large plot of land, while potentially making it possible to reduce other property-related taxes. This could also affect property prices, as new taxes tend to be reflected in valuations.'
London's Prime Property Market at Risk
The warning specifically targets London, where prime residential properties could see reduced values as buyers factor in higher annual tax bills. Williams noted: 'High-value houses in prime locations like central London might fall in value as buyers factor in higher ongoing tax costs. But flats could remain in demand, rising in value as the cost burden for the freeholder would be spread across multiple units.'
Burnham has described the current council tax system as 'highly regressive' and based on outdated 1991 property valuations. Council tax reform was already under consideration in the last Autumn Budget, and Williams believes changes could come as soon as this year.
Existing Surcharges Compound the Impact
Williams highlighted that a high-value council tax surcharge (HVCTS) is already scheduled for 2028, affecting properties valued at £2 million or more. She warned: 'If you own a second home worth £2m or more, a land value tax could increase your annual costs even if stamp duty disappears.'
While no final decisions have been made, Williams advised property owners to prepare for potential changes: 'If you have property, investments, or a larger estate, it’s important to understand how potential UK tax changes under Andy Burnham could affect your long‑term plans.'
