Andy Burnham’s government is considering one of the most significant reforms of Britain’s property tax system in decades, with Treasury officials examining proposals that could replace council tax and stamp duty with a new annual levy.
According to The i Paper, officials are exploring options for a comprehensive overhaul as pressure grows within Labour to modernise a system widely criticised as outdated and inequitable. More than 100 Labour MPs are said to support reform.
Jonathan Brash, Labour MP for Hartlepool and chair of the All-Party Parliamentary Group on Council Tax Reform, argued the current regime places an unfair burden on households in less affluent parts of the country.
“Council tax is one of the most unfair taxes in Britain,” he said, noting that a Band D property in Hartlepool attracts a substantially higher council tax bill than an equivalent home in Wandsworth, south-west London.
“We don’t need another sticking plaster. We need wholesale reform.”
Two models are understood to be under consideration. One would replace both council tax and stamp duty with an annual property tax of 0.48 per cent based on a home’s current market value. Another would introduce a land value tax, charging owners according to the value of the land rather than the property built upon it.
Supporters argue either approach would create a fairer and more transparent system while reducing distortions in the housing market created by stamp duty.
The debate also reflects Andy Burnham’s long-standing interest in property tax reform. During Labour’s 2010 leadership contest, he argued that a land value tax should replace stamp duty, describing the existing levy as “a tax on the aspirations of young people”.
Any overhaul would represent one of the most politically sensitive elements of Burnham’s wider fiscal agenda, with ministers seeking to balance tax reform against mounting pressures on the public finances and housing affordability.
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