Speculation and conjecture

Such speculation is, perhaps, a little premature; not least because we have only just found out who the Chancellor will be under the next incarnation of the current government.

A quick recap via CoPilot sagely informs me it is “useful” to distinguish between policies which Mr Burnham “has explicitly committed to” and those which he has merely “signalled openness to.”

It goes on to say that Mr Burnham has categorically stated that he will honour tax commitments from Labour’s pre-election manifesto. That would mean no increases in Income Tax, VAT and employee National Insurance.

By contrast, while he has described Council Tax as regressive and has long been drawn to the concept of a land value tax, the matter of whether he would pursue a substantial overhaul of property taxation remains one of conjecture.

Trouble at the policy mill

In the absence of any actual commitment, much has been made of the Fairer Share Campaign which calls for a flat rate tax of 0.48% on property value to replace Council Tax and Stamp Duty, payable by property owners and not tenants, with a 0.96% charge suggested for second homeowners.

That would result in a substantial geographical redistribution of tax liabilities and erode much of accountability for local government finance – that sits somewhat at odds with a wider policy of devolution.

As drafted it would also mean that the element of Council Tax that is currently shouldered by 4.7 million private renters and 4.1 million social renters gets passed to their landlords. That would mean these 8.8 million households no longer have a financial stake in the funding of local services, though private renters might find their rents go up by a commensurate sum over time.

Short of endorsement

And so it seems reasonable to conclude that imposing such a seismic change in property taxation would carry fairly significant political risk, without a mandate from the electorate to do so. 

Add to that the difficulties in both valuing the nation’s housing stock and avoiding double taxation where someone has recently paid Stamp Duty, then it becomes increasingly hard to see how it could be implemented in practice over the course of the remainder of this Parliament.

No wonder that my new virtual pal tells me that while “much of the recent media has conflated Burnham’s support for a proportional property tax model, he has not endorsed its specific prescription.”

A sense of deja vu

And we shouldn’t forget that only last autumn we were dissecting an array of possible changes in the taxation of high value property. Having been floated in the media in the run-up to the Budget, the pros and cons of each received no shortage of scrutiny.

We ended up with a High Value Council Tax Surcharge that is due to be introduced in April 2028 across England and a series of additional tax bands in Scotland. 

With HVCTS surcharges ranging from £2,500 for properties worth between £2m and £2.5m in 2026 to £7,500 for those worth £5m+, it was never designed to be a massive revenue raiser. And the valuation exercise alone meant it was always going to be relatively costly and bureaucratic to administer.

But it did seem to plug a hole in a woefully outdated Council Tax system. And the scale of the changes also appeared to recognise that the highly progressive nature of Stamp Duty significantly offset the regressive nature of Council Tax.

So, however antiquated the Council Tax system might be and however distortive the Stamp Duty system undoubtedly is, it would still take a brave individual to bet on an overhaul before the next general election.

Further information

Contact Lucian Cook