Council Tax & Stamp Duty Shake-Up: What Burnham's Backing Means for You

A significant shift in how we pay for local services and property purchases could be on the horizon, with Andy Burnham throwing his weight behind proposals to overhaul Council Tax and Stamp Duty. This move, backed by the 'Fairer Share' campaign, suggests replacing both taxes with a new annual levy based on a property's current market value.

What's on the Table?

The 'Fairer Share' campaign proposes an annual charge equivalent to 0.48% of a property's current market value for primary residences. For second homes, empty properties, and those owned by overseas buyers, this charge would double to 0.96%.

To put this into perspective, for an average UK home valued at £270,000 (ONS, April 2026), the annual levy would be approximately £1,296. The campaign highlights that a £250,000 home would face an annual charge of around £1,200, while a £1 million home would pay £4,800 per year.

How Does This Compare to the Current System?

Currently, homeowners pay Council Tax based on property valuations from 1991, leading to significant regional disparities. For example, a standard Band D property in Makerfield faces a council tax bill of £2,152 in 2026, while properties of similar value in Westminster might pay less.

Stamp Duty Land Tax (SDLT) is an upfront cost for buyers. From April 1, 2025, standard residential SDLT rates reverted to 0% on the first £125,000, rising to 12% on anything above £1.5 million. First-time buyers currently benefit from relief, paying 0% on the first £300,000 and 5% on £300,001 to £500,000, with no relief above £500,000.

The proposed reform would eliminate these upfront SDLT costs, which could be a boon for buyers, but introduce a new, ongoing annual payment for all property owners.

What this means for you

If these proposals were enacted, the biggest change would be the shift from a large upfront cost (Stamp Duty) to a smaller, but continuous, annual payment based on your home's current value. For first-time buyers, the removal of Stamp Duty could make getting on the ladder easier, but they would immediately face an annual property levy. Existing homeowners might see their annual outgoings change significantly, depending on their property's current market value compared to its 1991 valuation band.

Scenarios for Homeowners and Buyers

Existing Homeowners: If you own a home currently valued at £250,000, your annual payment could be around £1,200 under the new system. Compare this to your current Council Tax bill. Some in areas with historically low council tax or rapidly appreciating property values might see an increase, while others could see a reduction.

First-Time Buyers: Imagine you're saving for the average UK house price of £270,000. Under the current system, you'd pay 0% SDLT up to £300,000. Under the proposed system, you'd pay no SDLT, but an annual levy of around £1,296. This could free up cash for your deposit, but introduces a new recurring cost.

When saving for a deposit, consider utilising a Lifetime ISA (LISA) if you're a first-time buyer under 40. You can contribute up to £4,000 a year and the government adds a 25% bonus, meaning you could get £1,000 free each year. For other tax-free savings, a Cash ISA is an option, and remember your Personal Savings Allowance means most people can earn some interest tax-free.

Renters: While this reform directly targets property owners, changes to property taxation can ripple through the rental market. Landlords might adjust rents in response to their new annual levy, potentially impacting the average UK monthly private rent, which stood at £1,383 in May 2026 (ONS).

But there are risks

While the 'Fairer Share' campaign claims 18 million households would pay less, this reform would undoubtedly create winners and losers. Homeowners in areas where property values have soared but Council Tax bands remained low could face significantly higher annual bills. Conversely, those in areas with high Council Tax but stagnant property values might benefit. The Bank of England's Base Rate is currently 3.75% (June 18, 2026), and average two-year fixed mortgage rates are around 5.07% (June 2026), meaning housing affordability remains a key concern, regardless of tax structure.

What to do right now

1. Stay Informed: This is a proposal, not yet law. Keep an eye on political developments and any further details released by the 'Fairer Share' campaign or political parties.
2. Review Your Finances: If you're a homeowner, understand your current Council Tax bill and estimate your property's market value to gauge potential impact.
3. Smart Savings: If you're a first-time buyer, continue to maximise tax-efficient savings like a Lifetime ISA or Cash ISA. Remember, savings rates may be variable or include temporary bonuses.
4. Seek Advice: For personalised guidance on your mortgage and property finances, speak to an independent mortgage adviser.

When effective

These proposals are currently part of a campaign backed by Andy Burnham. There is no set effective date, as they would need to be adopted into policy and passed into law by a future government.

Where to get help

For detailed information on your current Council Tax band, contact your local authority. For independent advice on mortgages, savings, and financial planning, consult a qualified financial adviser or mortgage broker.

This is not financial advice. Seek independent mortgage guidance. Savings rates shown may be variable and include introductory bonuses. Interest may be taxable above your Personal Savings Allowance.

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