Millions of homeowners could face a property tax shake-up under Andy Burnham, with some households potentially paying around £1,000 more a year if a controversial levy backed by the former Greater Manchester Mayor is introduced. The warning comes after Burnham emerged as the overwhelming favourite to replace Keir Starmer following the Prime Minister's resignation. After securing a decisive victory in the Makerfield by-election and with no major challenger expected to enter the Labour leadership race, Burnham is widely anticipated to be handed the keys to No 10 within weeks.
Land Value Tax Could Replace Council Tax
Among the policies attracting attention is Burnham's longstanding support for a land value tax, a system that could replace council tax and potentially stamp duty. Supporters argue the reform would create a fairer system, while critics warn it could hit homeowners in wealthier areas, particularly London, with significantly higher bills.
According to analysis highlighted by the Evening Standard, households in the second-richest tenth of the population could face an average increase of £991 per year if council tax were replaced by a land value levy on a revenue-neutral basis. Those in the highest income bracket could see bills rise by an average of £966 annually.
London Expected to Bear the Brunt
Because land values in London are substantially higher than elsewhere in the country, the capital is expected to bear the brunt of any changes. The prospect has already raised concerns among some London politicians, who fear Burnham could shift investment and resources away from the capital in favour of regional growth.
Burnham has made no secret of his support for reforming property taxation. Speaking recently, he said: "I've long been persuaded of the argument for a land value tax." He added: "I'm personally keen to see reform of council tax. It's a highly regressive tax. I see a big case for land and property and business taxation to be changed."
Longstanding Support for Reform
The Labour leader-in-waiting has been making the case for reform for years. During his first bid for the Labour leadership in 2010, Burnham argued that a land value tax could help younger people get onto the property ladder by replacing stamp duty. "The LVT, an annual tax on the market rental value of land, would allow for the abolition of stamp duty - a tax on the aspiration of young people to put down roots and get on with life," he said at the time.
Impact on Different Income Groups
Supporters of a land value tax argue that the current council tax system is outdated and unfair because it is based on property valuations from the early 1990s. They say a modern system linked to land values would better reflect wealth and could reduce bills for lower-income households. Research cited by the Evening Standard suggests the poorest tenth of households could be better off by an average of £481 a year under such a system. However, wealthier homeowners, particularly those living in high-value areas of London and the South East, could face significantly larger tax bills.
