Axe stamp duty? How Andy Burnham could change property tax
Sir Andy Burnham, as the new prime minister, is considering an overhaul of property taxation in the UK to help fund social care reform and increased defence spending. Options being explored include scrapping stamp duty and replacing council tax with a single annual property or land levy, an idea that has long appealed to economists and politicians who see residential property, the UK's largest store of wealth, as an under-taxed asset.
Council tax, based on 1991 valuations, is widely regarded as outdated and regressive, hitting lower-value homes proportionally harder, while stamp duty is progressive but volatile, drying up during downturns. The OBR estimates council tax will raise £51bn in 2025-26, alongside £34bn from business rates and £17bn from property transaction taxes. UK residents held around £5.5tn in property wealth (after mortgages) in 2022, and reformers argue a flat-rate levy based on updated valuations, potentially aided by AI, would generate steadier revenue and favour poorer areas where high council tax bills currently deter people from moving.
- Burnham weighs scrapping stamp duty for a new property/land tax.
- Aim is funding social care reform and higher defence spending.
- Council tax, based on 1991 values, seen as outdated and regressive.
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UK property taxes include council tax, paid to local councils, and stamp duty, usually paid when someone buys a property. Council tax bills are based on home values in 1991, while stamp duty is charged on property purchases and tends to bring in less money when the housing market slows.
Sir Andy Burnham is the UK’s new prime minister. The reported proposals concern how the government might tax homes and land, which together make up a large share of household wealth, and how that revenue could help pay for public services such as social care and defence.
Changing these taxes could affect homeowners, people buying or selling homes, and local councils that rely on council tax income. The main questions include how any new levy would be calculated, how bills would differ between households and places, and whether the changes would raise reliable revenue.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Council tax, frozen at 1991 valuations, is regressively structured and hits lower-value properties disproportionately hard, whilst stamp duty creates damaging volatility in public finances and discourages necessary property transactions. Property represents Britain's largest store of wealth yet faces relatively light annual taxation. A reformed system with modernised valuations and a steady annual levy would generate reliable revenue for essential services like social care and defence, whilst promoting economic efficiency—people would no longer face large transaction penalties deterring moves, and the system could be designed progressively to ease the burden on modest properties in disadvantaged areas.
The case against
Property ownership has long anchored British prosperity and aspiration, and shifting to an expanded annual wealth tax represents a substantial new burden on homeowners who have already paid through transaction costs. The change would particularly strain middle-income families and retirees on fixed incomes, who might face difficult decisions about keeping family homes as annual levies tied to property values climb. Moreover, revaluing properties after 35 years risks fierce political resistance in areas where values have surged, and implementing AI-based valuations on this scale presents unproven technical and fairness challenges for something so fundamental to household finances.