Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.

Burnham Urged to Consider Major Overhaul of UK Property Tax System

Prime Minister Andy Burnham is facing calls from Labour figures and left-leaning think tanks to reform property taxation in the UK. Proposals include replacing council tax and stamp duty with a proportional property tax (PPT).

Burnham has previously supported the principle of a PPT, but has indicated that significant property tax reform is not imminent. Michael Jacobs, emeritus professor of political economy at Sheffield University and former adviser to Gordon Brown, is among those advocating for change. Jacobs is editing a Compass publication outlining 70 policies for government consideration.

According to Jacobs, replacing council tax and stamp duty with a proportional tax could reduce bills for many households, while owners of higher-value properties would pay more. One model previously backed by Burnham and promoted by the Fairer Share campaign would impose an annual charge equivalent to 0.48% of a property’s value. The rate would increase to 0.96% for second homes, empty properties, and homes owned by foreign nationals.

Under these proposals, many homeowners—particularly in and around London where property prices are higher—could face increased bills. Households in lower-value properties could pay less. Estimates suggest that London could contribute an additional £7.5bn annually under this system.

The Institute for Public Policy Research (IPPR) has also called for reform. A paper by Oxford professor Ben Ansell proposes replacing council tax and stamp duty with a PPT as part of a broader shift in taxation towards property and wealth. Ansell’s proposed “fiscal contract” also includes extending National Insurance to older workers, aligning capital gains tax with income tax rates, and introducing an investment allowance to protect normal investment returns.

These discussions are relevant for letting agents and inventory clerks, as changes to property taxation could impact property owners, landlords, and the wider UK property market.