While no formal policy has been announced, reports suggest Burnham backs the proportional property tax (PPT) proposed by the Fairer Share campaign. The scheme would replace both council tax and stamp duty with an annual levy based on 0.48% of a property’s value, rising to 0.96% for second homes, empty properties and homes owned by overseas buyers.
The proposal has already prompted debate across the property sector over who would benefit and who would pay more.
Analysis published by the Fairer Share campaign suggests the impact would vary significantly by location. In London, a majority of households would pay less in just four boroughs: Barking and Dagenham (58%), Islington (52%), Southwark (52%) and Hackney (51%), while half of households in Croydon would also see lower bills.
At the other end of the scale, Westminster would be the hardest-hit borough. The campaign estimates that only 12% of households would pay less, with the remaining 88% facing higher property taxes, although many would see relatively modest increases.
The proposal would place liability on property owners rather than tenants, meaning renters would not pay the tax directly. However, there is concern that landlords could seek to recover some or all of the additional cost through higher rents.
According to reports, any increase in property tax would initially be capped at £1,200 a year for existing homeowners. The cap would fall away once a property is sold, after which the full annual charge would apply under the proposed system.
“We’re very grateful for Andy’s (Burnham) support,” said the Fairer Share campaign’s chairman Andrew Dixon
“He’s been for a long time now a passionate believer in land value tax and in many ways this is a de facto land value tax, very progressive, ensures that there’s a flat rate for everyone up and down the country, and also ensures that those with the broadest shoulders pay their fair share,” he added.
The campaign estimates that the owner of a £700,000 property would pay £3,360 in PPT and that is around the same level of council tax for a property of that value.
