Prime Minister Andy Burnham is facing pressure from Labour figures and left-leaning think tanks to consider an overhaul of property taxation. Proposals suggest replacing council tax and stamp duty with an annual property tax paid by owners.
Mr Burnham has previously supported the principle of proportional property taxation, which could see a yearly charge of 0.48% of a property's value. However, he has indicated that major reform is not imminent.
One think tank is proposing a higher rate of 0.96% for second homes, empty properties, and homes owned by non-residents. Under the 'Fairer Share' model, the liability for this new tax would move from tenants to property owners.
For example, a home valued at £250,000 would incur a £1,200 annual bill at the 0.48% rate, while a £500,000 property would be charged £2,400. At the higher 0.96% rate, these bills would rise to £2,400 and £4,800 respectively.
Estimates suggest London homeowners could contribute an additional £7.5 billion annually, with hundreds of thousands facing initial increases capped at £1,200 per year. The 'Fairer Share' proposal also includes transitional protection and payment deferrals for homeowners with valuable properties but limited income.