Prime Minister Andy Burnham is facing calls from Labour figures and left-leaning think tanks to overhaul property taxation. Proposals include replacing council tax and stamp duty with a proportional property tax (PPT).
Burnham has previously supported the principle of a PPT, but has indicated that major property tax reform is not imminent. Michael Jacobs, emeritus professor of political economy at Sheffield University, is among those advocating for change. He told the BBC that replacing council tax and stamp duty with a proportional tax could reduce bills for many households, with owners of higher-value properties paying more.
One model, promoted by the Fairer Share campaign and previously backed by Burnham, proposes an annual charge of 0.48% of a property’s value. This rate would increase to 0.96% for second homes, empty properties, and homes owned by foreign nationals. Estimates suggest this system could lead to London contributing an additional £7.5bn annually.
The Institute for Public Policy Research (IPPR) has also called for reform. Oxford professor Ben Ansell proposes a PPT as part of a wider shift in taxation towards property and wealth. Prof Ansell's proposals also include extending National Insurance to older workers and aligning capital gains tax with income tax rates.