Key Takeaways
- Changes to stamp duty have been expected for years but failed to materialize.
- Andy Burnham has previously backed a land value tax in place of stamp duty.
- The levy is highly controversial in the UK, but it accounts for nearly £10 billion in government revenue.
With Andy Burnham’s arrival at Downing Street and John Healey’s appointment as chancellor, the new regime’s policies are being closely watched. Key points are whether taxes will rise and whether the state pension triple lock will be maintained. Experts say one area is ripe for reform: property taxation. Whether this forms part of a wider “raid” on the assets of the wealthy is still unclear.
Stamp duty, a key property tax, has long been the subject of criticism. The tax has been tweaked under various chancellors, including temporary “holidays” during covid-19 and changes to bands to improve the prospects of first-time buyers. No policymaker has been brave enough to take the axe to the levy altogether, which would save homebuyers thousands of pounds but cost the UK government nearly £10 billion in revenue.
Successive governments have become “addicted to what is probably the UK’s worst tax,” says Dan Neidle, founding director of Tax Policy Associates. “Each increase damages growth, jobs, and happiness, but still raises additional tax.” Burnham hasn’t recently taken a clear position on stamp duty, but in 2010, he decried it as “a tax on the aspirations of young people.”
UK Property Taxes Are Set to Rise
Rachel Reeves, who left her role as chancellor as part of the summer reshuffle of the cabinet, was tipped to abolish stamp duty at the delayed Autumn Budget in November 2025. While homebuyers’ hopes were dashed, she did initiate changes to council tax targeted at those owning expensive properties. In the end, talk of a unified “UK property tax” to replace both stamp duty and council tax foundered. But with the “high-value council tax surcharge” coming into effect in 2028, there is still the potential for a change of course for a government keen to rebalance Britain’s economy.
What Is Stamp Duty Land Tax?
Stamp duty land tax is paid by those buying properties, based on the property’s value. The bands are:
- Up to £125,000: no tax due
- £125,000-£250,000: 2%
- £250,001-£925,000: 5%
- £925,001-£1.5 million: 10%
- Above £1.5 million: 12%
Stamp duty rates are higher for purchases of second homes. First-time buyers pay no tax on purchases up to £300,000, then 5% on properties between £300,000 and £500,000. Other reliefs are available.
Those who rent or own property also pay council tax, which is based on the value of the property at 1991 levels. This is set locally and pays for services like refuse collection and street cleaning. Critics say this takes a higher proportion of money from lower-income families than higher-income ones. It also ignores the significant uplift in house prices occurred over the last 35 years, particularly in the South of England.
What Has Burnham Said About Property Tax?
When he ran for Labour leadership for the first time in 2010, Burnham made his feelings clear about stamp duty, arguing instead for a land value tax, or LVT. “The LVT, an annual tax on the market rental value of land, would allow for the abolition of stamp duty—a tax on the aspirations of young people to put down roots and get on in life,” he said.
It’s now considered highly likely that a Burnham government would look carefully at consolidating and reforming these key areas of taxation. But questions over funding remain amid departmental spending pressure, elevated gilt yields, and local councils’ struggles to stave off financial collapse.
“The key questions over the coming months will be how these proposals are funded, how regional powers interact with national tax policy, and whether the government can deliver greater local autonomy without creating additional complexity for businesses and taxpayers,” says Sean Bannister, head of tax at Edwin Coe.
New prime ministers usually start at their most powerful, with the impetus to bring in their boldest ideas. The Burnham government’s first obvious opportunity to make radical fiscal changes would likely be the Autumn Budget, due in October—but it could come earlier.
With Burnham understood to have been critical of the Labour Party’s previous failure to be bold, there may be an early “emergency budget,” like the fiscal statement delivered in July 2015 by the new majority Conservative government. Burnham has already said he wishes to look at income tax, capital gains tax, and potentially a “national care levy” to pay for social care. Against that backdrop, changes to stamp duty could be on the agenda.
