Households in England set for £1,096 boost under Andy Burnham property tax | Personal Finance | Finance

Proposals reportedly being considered by new Prime Minister Andy Burnham to level the playing field on property taxes could save the average household more than £1,000 a year.

Reports this week have suggested that Mr Burnham wants to abolish the unpopular property taxes, council tax and stamp duty, and replace them with a flat 0.48% annual property tax. Speaking in interviews before he became PM, he pointed to unfairness within the current system, which sees houses in Manchester paying more council tax than those in London.

Number 10 has denied that the Government was considering replacing council tax and stamp duty with a tax based on property or land values, but Mr Burnham has made repeated reference to reforming property taxes.

This week, it was reported by The i Paper that he is actively considering replacing council tax and stamp duty with a 0.48% annual charge on a home’s current value, or a land value tax.

Currently, the average England, Scotland or Wales property value is £270,000 according to HM Land Registry.

Should such a change be put in place, it would mean that the average home would attract a £1,296 annual property tax, at 0.48% levied on £270,000.

The average Band D council tax bill is £2,392 a year in England, so the new tax would represent a £1,096 saving for an average household in England.

This does not include any possible Stamp Duty changes for those moving house. Stamp Duty is the tax paid on buying property valued at over £125,000, and this would also be removed under the reported proposals.

Stamp duty is paid on sales from £125,000 upwards, although first-time buyers benefit from not having to pay any on purchases up to £300,000. However, the relief ends at prices over £500,000.

Speaking to Laura Kuenssberg on the BBC’s Panorama programme, Mr Burnham said: “There are people here in Greater Manchester who pay a much higher council tax than people living in much larger homes in London.

“So the Chancellor before, Rachel Reeves, was right to start to reform council tax to create some fairness there in relation to people in homes that are of much greater value, who haven’t seen their council tax go up over the years because of the failure to revalue the banding. So that’s an example of something that I think was right and fair.”

He added: “We need to honour the manifesto upon which Labour was elected, and if I were to bring forward any changes, obviously people would rightly say, well, is this consistent with that manifesto?

“So there are big decisions ahead, you are right about that.”

Mr Burnham has previously said he has been “persuaded” of the argument for reforming the system.

However, on Sunday night, Number 10 denied reports by the i Paper that he was actively considering replacing council tax and stamp duty with a 0.48% annual charge on a home’s current value, or a land value tax.

According to the Fairer Share Campaign, the flat-rate annual charge could save households in areas such as Hartlepool about £950 a year.

Labour has come under pressure from its back benches to reform council tax, including from the chairman of the cross-party group of MPs on council tax reform, Jonathan Brash (Hartlepool).

The Labour MP told The i Paper “wholesale reform” was needed. He has previously pointed to Band A homes in Hartlepool paying nearly 2.5 times more than in Westminster.

He said: “Council tax is one of the most unfair taxes in Britain, and nowhere is that injustice clearer than in towns like Hartlepool.”