Will Burnham cut stamp duty? Here’s what PM hopeful could change to property taxes
Andy Burnham made his first major speech on Monday as he prepared to enter No 10 and become the new prime minister.
There are still few clear details of what will change, with Mr Burnham laying out a “ten-year mission” to raise living standards.
But his stance on property tax reform in particular is well documented, and over time, Brits could see one of the biggest shifts in this area of their financial lives in generations.
Stamp duty, council tax and wider costs of owning property or land can be changed. Here Independent looks at what these changes might be.
Stamp duty or LVT?
One of the hot topics will be whether the Burnham government will actually abolish stamp duty; It’s an annoying extra cost for homebuyers, but also an annoying additional expense for investors buying British shares.
Economists have long criticized stamp duty for deterring people from moving into their homes. Speculation has grown that a future government might consider replacing this with some form of annuity or, as Mr Burnham had previously mentioned, a Land Value Tax (LVT), an annual payment based on the value of land.
Burnham has previously described LVT as “a very efficient form of taxation because you make sure the land is used for good, productive purposes, and if people sit on it and hoard it, they get taxed and the money can come back and be redistributed.”
Peter Stimson, mortgage manager at lender MPowered, believes few people would shed a tear if stamp duty was abolished. “No one will be upset about the stamp duty being passed,” he said. “This is a rude and hated tax that unnecessarily distorts the real estate market.”
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He argues that the tax penalizes workers who leave for better jobs and discourages older homeowners from downsizing. Its absence “will make it easier and cheaper” […] “They need to move to a place that better suits their needs,” he adds.
According to Stimson, the removal of stamp duty could trigger an increase in market activity as one of the biggest barriers to moving is removed. However, replacing it with Land Value Tax will create a new set of winners and losers.
“If it were replaced by a Land Value Tax, mortgage lenders would have to completely rework their affordability criteria,” he said, because the charge would become a permanent household expense rather than a one-off cost.
Joseph Lane, founder of Mortgage Lane, said these offers (and others made by Burnham in Manchester on Monday) are currently offers for home buyers or conveyancers to consider rather than something to plan for. “A serious focus on construction is one of the few things that really helps affordability over time, and any move towards reform or the removal of stamp duty reduces the up-front cost of getting on the ladder. But these are long-term possibilities, not changes that you can plan to buy in 2026,” he said.
The biggest distinction around LTV may be geographic. Areas with lower property values, including much of northern England, may have to pay less than under the current council tax system. Homeowners in London and the South East could face significantly higher bills.
“It’s great news in the north, but it’s likely to be painful in the south,” Mr. Stimson says.
He adds that “it would not be a good look for the King of the North to shower favors on his northern power base while his Southern subjects pick up the bill.”
‘Fairer sharing’ property tax
Elsewhere, Mr Burnham has previously expressed interest in the idea put forward by Fairer Share campaigners that council tax could be replaced by a property tax equivalent to 0.48 per cent per annum, based on the value of the property in question.
Some experts have previously suggested this could lead to rental properties being sold off, reducing supply and rising prices, especially in areas where rental margins are thin.
But Duncan and Toplis tax director Nicholas Smith said there were real obstacles to such reform and regional differences were again visible.
“Andy Burnham’s historic support for the Fair Share campaign is an ambitious concept, but practical hurdles are also significant,” he said. “One of the key challenges is that regular and accurate property valuations are difficult to assess across the UK.
“Furthermore, the regional impact would be heavily skewed. For example, under a 0.48 per cent proposal, a £1 million property would face an annual charge of £4,800, significantly higher than the current average council tax bill. This would hit the south-east of England hardest, potentially encouraging migration from the region to other parts of the country and even abroad, while leaving some families struggling with additional costs without sufficient funds to pay the proposed tax.
“The broader net economic impact of these property tax changes remains unclear and may have unintended consequences.”
From a broader perspective, Antonia Medlicott, founder of financial education firm Investing Insiders, noted that changes could be made to tax property more in line with other income and wealth.
He said: “Burnham spoke of his belief that land and property were taxed less than income earned, and pointed out that over time assets would be taxed more.
“He also mentioned the possibility of reintroducing the 50p income tax rate on incomes over £125,140, replacing inheritance tax with a maintenance tax entirely to fund social care.”
